US retail sales flat in July | News, Sports, Jobs

WASHINGTON — The pace of U.S. retailer sales was flat last month as persistently high inflation and rising interest rates forced many Americans to spend more cautiously.

Retail purchases were flat after rising 0.8% in June, the Commerce Department reported Wednesday. Economists expected a slight increase.

Still, Wednesday’s report contained some positive signs: excluding autos and auto parts, retail sales rose 0.4% in July.

Lower gas prices have likely freed up money for people to spend elsewhere. Gasoline sales fell 1.8%, reflecting lower prices at the pump.

“As gasoline prices fell, consumers had more money in their pockets for other items such as furniture and electronics,” said Jeffrey Roach, chief economist at LPL Financial.

Sales of building materials and garden equipment held up, as did sales at electronics and appliance stores.

At the same time, consumers remained reluctant to spend heavily on non-essentials: sales fell 0.5% at department stores and 0.6% at clothing stores.

Compared to 12 months ago, overall retail sales rose 10.3% in July.

U.S. consumers, whose spending accounts for nearly 70% of U.S. economic activity, remained mostly resilient even with year-over-year inflation near a four-decade high, economic uncertainties growing and soaring mortgage and borrowing costs. Still, overall spending has declined and shifted more and more toward things like groceries, and away from less necessary things like electronics, furniture, and new clothes.

The government’s monthly retail sales report covers around a third of all consumer purchases and does not include spending on most services, ranging from plane tickets and apartment rents to cinema tickets and doctor visits.

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