Retail Sales Beat Forecasts, Consumer Resilience Surprises Analysts

US Retail Sales Flat in June, Defying Expectations

US retail and food services sales remained unchanged in June at $704.3 billion, according to the latest Census Bureau report. This figure defied predictions of a 0.3% monthly decline, suggesting resilience in consumer spending despite economic headwinds. Core retail sales also beat pre-report forecasts of a 0.1% rise, coming in at 0.4%.

Year-over-Year Growth

Despite the flat monthly performance, June’s retail sales showed a 2.3% increase compared to the same month last year. This growth indicates that consumer demand remains relatively robust on an annual basis.

Sector Performance

Retail trade sales specifically saw a slight 0.1% decrease from May 2024. However, they still managed a 2.0% increase compared to June 2023. Notably, nonstore retailers, which include e-commerce platforms, demonstrated strong growth with an 8.9% increase from the previous year.

Food Services Rebound

The food services and drinking places sector showed significant strength, posting a 4.4% increase compared to June 2023. This growth suggests a continued recovery in the hospitality industry.

Quarterly Performance

Looking at the broader picture, total sales for the April through June 2024 period were up 2.5% from the same period a year ago. This indicates a steady, if modest, expansion in retail activity over the quarter.

Revisions to Previous Data

The report also included a revision to May’s figures. The April to May percent change was adjusted from a 0.1% increase to a more substantial 0.3% rise, painting a slightly more positive picture of spring retail performance.

Market Forecast

The unexpected stability in June retail sales, coupled with the strong performance in e-commerce and food services, suggests a cautiously bullish short-term outlook for consumer-related stocks. While concerns about interest rates and inflation persist, the resilience of US consumers may provide support for retail sector equities in the near term. Traders should monitor upcoming economic indicators closely for further confirmation of this trend.