“Retail sales continued to contract, while consumer credit saw gains, and layoffs enjoyed a slight drop”.
Economic Update for Retail Sales
Retail and food service sales for June fell 0.2 percent from May, notching down to $473.5 billion, the Census Bureau reported last week. This marked the second straight monthly decline in retail sales, which the market had expected to grow by 0.1 percent. Compared to the same period last year, June’s sales were 2.8 percent below June 2016
Segments of the retail marketplace that saw significant declines included miscellaneous retailers — a broad category including shops such as florists, pet stores and sellers of used merchandise —which saw sales decline 3.1 percent; gas stations, which fell 1.3 percent; department stores, which dropped 0.7 percent; and sporting goods, hobby, book and music stores, which were down 0.6 percent.
Given the broad range of retail categories that turned in shrinking sales, May’s data would generally indicate continued caution on the part of American households to spend on consumer exchanges. That said, one segment of retail sales that bucked the downward trend was non-store retailers, a category which is dominated by online retailers. Those sellers saw sales increase 0.4 percent for the month, and when compared to last year, enjoyed 9.2 percent higher sales. So, it is likely that multiple consumer trends are at work.
“From everything you read you would think that retailers are dying out,” Betsy Goodman, retail program head for the University of Florida, told the Orlando Sentinel last week. “The online business has had some impact, but it doesn’t account for all the closures we’ve seen. It’s the stores that aren’t adapting that are dying.”
Economic Update for Consumer Credit
Consumer credit saw a decent jump for May, growing 5.8 percent to hit a total of $3.842 trillion for the month, according to last week’s report from the Federal Reserve. This was the highest rate of monthly gains in seven months.
A big contributor to May’s growth was revolving debt, such as credit cards, which grew a solid 8.7 percent to hit a total of $ 1.018 trillion. Non-revolving debt, such as car and student loans, also showed a respectable gain, growing 4.7 percent to hit $2.824 trillion.
Economic Update for Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly unemployed during the week ending July 8 declined to 247,000, a drop of 3,000 claims from the prior week’s total of 250,000, according to last week’s report from the Employment and Training Administration. While down, this week’s total was slightly higher than market expectations of 245,000 claims.
The four-week moving average — considered a more stable measure of initial jobless claims — notched down up to 245,750, a gain of 2,250 claims from the preceding week’s average of 243,500claims.
This marked the 123rd week that initial claims have fallen below the 300,000-claim level, which economists consider an indicator of a growing job market.