US Retail Sales Defy Predictions With Strong 0.7% Monthly Growth In July

Zinger Key Points
  • Retail sales outpaced expectations in July, surging 3.2% year-on-year (vs. 1.5%) and 0.7% month-on-month (vs. 0.4%)
  • Dollar declined after a brief spike, US stocks opened on a weaker note on Tuesday.

The U.S. retail sector displayed remarkable resilience in July 2023, recording a robust 0.7% monthly surge in total sales, surpassing the anticipated 0.4% increase and building on June’s upwardly revised 0.3% growth.

The advance estimates, released by the U.S. Census Bureau Tuesday, mark the fourth consecutive months of growth, a streak unseen since April 2022.

Retail sales also outpaced expectations when compared to a year ago, with a 3.2% increase compared to the projected 1.5%. Core retail sales, excluding automobiles, gasoline, building materials, and food services, exhibited a 1% rise for the month, accelerating from the prior 0.4%.

Nonstore retailers took the lead with a 1.9% surge in July, followed closely by sporting goods, hobby, musical instrument, and book stores, which experienced a 1.5% uptick. Food services and drinking places also enjoyed a 1.5% increase.

A striking reversal was seen in gasoline stations, shifting from a 1.5% decline in June to a 0.4% rise in July, and building material, garden equipment and supplies dealers, bouncing back from a 3.7% slump in June to a 0.7% increase in July.

Motor vehicle and parts dealers, however, experienced a contrasting trend, with a 0.3% decline in July following a 0.7% surge in June. Meanwhile, furniture and home furniture stores remained among the weakest kind of businesses, marking a 1.8% dip for the month and a 6.3% decrease compared to the same period a year ago.

Market Reactions: Dollar Takes a Dip and Stocks Show Fragility

Market reactions to the higher-than-expected July retail sales figure were mixed.

After a brief and initial spike on the release, the dollar jumped higher before falling back and erasing all gains.

In Monday's session, the SPDR S&P 500 ETF Trust SPY rose 0.55%, while the Invesco QQQ Trust QQQ was up 1.12%.

Now read: Nvidia Flooded With AI Chip Orders From Oil-Rich Saudi Arabia, UAE In Race For Computational Sovereignty: Report

Photo via Shutterstock.

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