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July Retail Sales Report Raises Some Concern

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U.S. retail sales dipped 1.1 percent in July from June’s level, prompting the Dow to retreat yesterday over fears the economic recovery could be slowing due to COVID-19, its Delta variant, and other factors.

However, it should be noted that year-over-year sales in July were up 13.3 percent and clothing/clothing accessory store sales jumped more than 43 percent as Back-To-School shopping started in earnest in some regions. On the shoe store front where monthly sales reports trail by a month in the report, adjusted June sales were up 21 percent year-over-year. On a non-adjusted basis, June’s shoe store sales were up 24 percent from June 2020 but off 7.1 percent from May 2021.

“July retail sales showed a slight deceleration in spending, but nothing to derail our outlook for a record year,” commented Matthew Shay, President and CEO of the National Retail Federation. “We remain optimistic that the strength of the American consumer and ingenuity of the retail industry will produce continued growth heading into the Fall.”

There are indications from the monthly U.S. Census Bureau report from the U.S. Dept. of Commerce that Americans shifted spending last month, a vacation period for many, to services such as travel, recreation, and entertainment.

But consumer sentiment was clearly down in early August, according to a monthly University of Michigan survey that believes the drop-off was largely related to dashed hopes about the pandemic’s end being close.

More should be known about consumer sentiment and purchasing habits this summer through the remainder of August as many public retailers, including Macy’s, Kohl’s, and Foot Locker, are slated to report quarterly results and conduct conference call updates with analysts.