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US Retail Revenue Robust Ahead of Tariff Hike

Sep 16, 2019 4:37 AM   By Rapaport News
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RAPAPORT... US retail sales rose in August, even as consumer confidence slipped slightly from the previous month amid the escalating trade war.

Total sales — excluding automobiles, gasoline and restaurants — rose 0.4% compared with July and 4.6% year on year, according to data the National Retail Federation (NRF) reported, citing the US Census Bureau. Online and other non-store sales climbed 14% year on year, the NRF noted.

“While consumer attitudes about the economy indicate some retreating optimism, the bottom line is that consumer spending remained resilient in August, and continued to be a key contributor to US economic growth,” NRF chief economist Jack Kleinhenz said last week.

However, August’s sales growth was slightly slower than July’s, which could reflect sliding consumer confidence. The numbers in August reflect the period prior to the first round of tariffs implemented by US President Donald Trump.

“Trends remain strong, but [the slight dip] could reflect consumers’ concerns about the unpredictability of trade policy,” Kleinhenz explained. “It is too early to assess the impact of the new tariffs that took effect at the beginning of this month, but they do present downside risks to household spending.”

Retailers may offset higher tax rates by raising the price of the goods they sell to reflect the hike. However, they are making an effort to avoid passing on the increase to customers by stocking up on extra goods prior to the levies going into effect, the NRF noted. 

Imports at major retail ports reached unusually high numbers just before the most recent tariffs took effect on September 1, and are expected to surge again before the next round of taxes in December, according to the group’s Global Port Tracker report. Shipments in August rose 1.8% year on year to 1.93 million TEU. A TEU is one 20-foot-long cargo container or the equivalent.

“Retailers are still trying to minimize the impact of the trade war on consumers by bringing in as much merchandise as they can before each new round of tariffs takes effect and drives up prices,” said Jonathan Gold, NRF vice president for supply chain and customs policy.

Image: Mall of America, Bloomington, Minnesota. (Flickr)
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Tags: Bureau of Labor Statistics, Global Port Tracker, Jack Kleinhenz, Jonathan Gold, National Retail Federation, NRF, Rapaport News, US Census Bureau, US retail sales
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