Current:Home > MarketsUS shoppers sharply boosted spending at retailers in July despite higher prices -Aspire Money Growth
US shoppers sharply boosted spending at retailers in July despite higher prices
View
Date:2025-04-18 07:04:16
WASHINGTON (AP) — Americans stepped up their spending at retailers last month by the most in a year and a half, easing concerns that the economy might be weakening under the pressure of higher prices and elevated interest rates.
The Commerce Department reported Thursday that retail sales jumped 1% from June to July, the biggest such increase since January 2023, after having declined slightly the previous month. Auto dealers, electronics and appliance stores and grocery stores all reported strong sales gains.
The July retail sales data provided reassurance that the U.S. economy, while slowing under the pressure of high interest rates, remains resilient. It showed that America’s consumers, the primary driver of economic growth, are still willing to spend.
Adjusted for inflation, sales rose about 0.8% last month. And excluding gas station sales, which don’t reflect Americans’ appetite to spend, retail purchases also rose 1%.
Consumers have been pummeled since the pandemic by high prices and elevated interest rates. Yet at the same time, average wages have also been rising, providing many households with the means to keep spending.
Inflation-adjusted wages have increased slightly from a year ago. Upper-income households have also seen their wealth increase, with stock prices and home values having jumped in the past three years. Increases in wealth can encourage more spending.
Auto sales jumped 3.6% last month, the largest increase since January 2023, a sign that rising inventories of cars on dealer lots are boosting purchases.
Sales at electronics and appliances stores surged1.6%. And they rose 0.9% at hardware stores and garden centers. Restaurant sales were up 0.3%, a sign that Americans are still willing to spend on discretionary items, such as eating out.
Financial markets had plunged earlier this month on fears surrounding the economy after the government reported that hiring was much weaker than expected in July and the unemployment rate rose for a fourth straight month.
Yet since then, economic reports have shown that layoffs are still low and that activity and hiring in services industries remains solid. Americans are also still splurging on services, such as travel, entertainment, and health care, which are not included in Thursday’s retail sales report.
Still, some economists worry that much of Americans’ spending now is being fueled by the increased use of credit cards. And the proportion of Americans who are falling behind on their credit card payments, while still relatively low, has been rising.
But cooling inflation may give households a needed boost. Consumer prices rose just 2.9% in July from a year earlier, the government said Wednesday. That was the smallest year-over-year inflation figure since March 2021. And core inflation, which excludes volatile food and energy costs, slipped for the fourth straight month.
While Americans are still willing to spend, they are increasingly searching out bargains. On Thursday, Walmart, the nation’s largest retailer, reported strong sales in the three months that ended July 31.
More Americans appear to be shopping at lower-prices outlets like Walmart. The company also boosted its sales outlook for this year and said that it hasn’t seen any signs of weakness from the consumer.
Other companies are also starting to offer lower prices to entice consumers, a trend that is helping slow inflation. McDonald’s said its global same-store sales fell for the first time in nearly four years in the second quarter. The company introduced a $5 meal deal at U.S. restaurants in June; most franchisees plan to extend that deal through August.
Arie Kotler, CEO of Arko Corp., a convenience chain based in Richmond, Virginia, said he’s noticed that shoppers have cut back their spending on discretionary items like salty snacks and candy bars since May. He said he thinks people are struggling with high interest rates on credit cards, with many of them maxed out.
___
AP Business Writers Anne D’Innocenzio in New York and Dee-Ann Durbin in Detroit contributed to this report.
veryGood! (55)
Related
- NHL in ASL returns, delivering American Sign Language analysis for Deaf community at Winter Classic
- New Hampshire Gov. Chris Sununu says he won't run for president in 2024
- See the Best Dressed Stars Ever at the Kentucky Derby
- Long COVID and the labor market
- 'Vanderpump Rules' star DJ James Kennedy arrested on domestic violence charges
- California Makes Green Housing Affordable
- Today’s Climate: May 4, 2010
- 988: An Alternative To 911 For Mental Health
- California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
- SEC sues crypto giant Binance, alleging it operated an illegal exchange
Ranking
- Federal hiring is about to get the Trump treatment
- Kevin Costner and Wife Christine Baumgartner Break Up After 18 Years of Marriage
- There's no bad time to get a new COVID booster if you're eligible, CDC director says
- How the Love & Death Costumes Hide the Deep, Dark Secret of the True Crime Story
- NFL Week 15 picks straight up and against spread: Bills, Lions put No. 1 seed hopes on line
- There's no bad time to get a new COVID booster if you're eligible, CDC director says
- How Georgia reduced heat-related high school football deaths
- Costs of Climate Change: Early Estimate for Hurricanes, Fires Reaches $300 Billion
Recommendation
Behind on your annual reading goal? Books under 200 pages to read before 2024 ends
Score $131 Worth of Philosophy Perfume and Skincare Products for Just $62
Judges Question EPA’s Lifting of Ban on Climate Super Pollutant HFCs
Japan launches a contest to urge young people to drink more alcohol
Rylee Arnold Shares a Long
How realistic are the post-Roe abortion workarounds that are filling social media?
Opponents, supporters of affirmative action on whether college admissions can be truly colorblind
Tony Awards 2023 Nominations: See the Complete List