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U.S. Department Store Sales Flat in July at $14B

Spending Climate Remains Vulnerable

Aug 12, 2011 9:00 AM   By Jeff Miller
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RAPAPORT... U.S. department store sales were basically flat in July at $14 billion, down just 0.4 percent year on year, according to government figures released today. Advance estimates of total U.S. retail and food services sales for July, unadjusted for price changes, rose 8.5 percent year on year to $390.4 billion. Retail trade sales jumped 8.9 percent from July 2010. 

In its own report released before government data, MasterCard Advisors’ SpendingPulse, a macroeconomic report tracking national retail and service sales, concluded that retail sales in the U.S. rose 6.4 percent year on year in July, on an unadjusted basis and excluding auto and gasoline sales. The rate of growth was  on par with the average growth of the previous three months. Total retail sales, excluding auto, rose 8.7 percent on an unadjusted basis, according to SpendingPulse.

Sectors showing positive results in July included ecommerce, luxury, apparel, groceries and travel.  Online retail sales posted double digit growth for the ninth consecutive month.  Luxury posted its tenth consecutive month of positive  growth.  Weaker segments included furniture and furnishings, automotive repair, and electronics and appliances.

Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse, said, ''Since March, non seasonally-adjusted retail sales have topped 8 percent year-over-year.  However, much of the 8.7 percent growth [in July] is from commodity based inflation in areas such as gasoline, food and cotton prices.   While the headline year-over-year increase resembles periods of strong economic growth, when you take a closer look at the comp environment and the year-over-year inflation, it tempers the enthusiasm that would normally accompany this level of year-over-year increase.''

McNamara  observed that the general state of the labor market and a mixed economic environment suggests that the current rate of retail expansion could be vulnerable, especially given the weight of higher fuel costs on discretionary spending. ''Additional momentum in the labor market could offset that uncertainty,'' he added.

Tags: Jeff Miller, july, retail, sales, SpendingPulse
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