Consumer spending was largely flat in June

Retail industry sales for June (which exclude automobiles, gas stations, and restaurants) rose 6.7 percent over last year and increased 0.2 percent seasonally adjusted over May, according to the National Retail Federation. 

June retail sales released today by the U.S. Commerce Department show that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 6.2 percent unadjusted year-over-year and decreased 0.2 percent seasonally adjusted from May. While industry-related sales paint a somewhat rosier picture than Commerce numbers, it still represents a slight slowing in consumer spending.

While year-over-year increases remain strong, month-to-month gains appear flat, NRF said. Health and personal care stores showed strong gains, increasing 8.6 percent unadjusted from last year, while increasing a slight 0.7 percent seasonally adjusted over May. Sporting goods, hobby, book & music stores also showed robust growth, increasing 11.3 percent unadjusted from last June, while increasing a modest 0.4 percent seasonally adjusted from the previous month. Clothing and clothing accessories stores, benefiting from the summer heat rose 5.9 percent unadjusted from last June, while only increasing 0.3 percent from May. Building material and garden equipment and supplies dealers still showed steady growth, up 8.4 percent unadjusted from last June. However, seasonally adjusted comparisons from the previous month show a 1 percent decline.

In spite of a slowing housing market, furniture and home furnishings stores remain healthy with a 10.4 percent increase in sales unadjusted from last year and 1.3 percent seasonally adjusted increase month-to-month.

“After months of speculation, consumers are beginning to pull back,” said NRF chief economist Rosalind Wells. “Retailers can expect the second half of the year to show moderate gains due to the slow down in the housing market and other economic factors such as rising interest rates and higher gas prices.”

According to NRF’s latest Retail Sales Outlook, retail industry sales in the third quarter are expected to increase 5.5 percent, followed by a gain of 4.6 percent in the fourth quarter. Because of the strong first half, even with some deceleration in sales for the balance of the year, industry sales are tracking to a 6 percent gain for the year.