Consumer spending far exceeded analysts’ projections in July, according to a new report by the National Retail Federation. July retail sales in general merchandise stores, clothing and clothing accessories stores, furniture and home furnishings stores, electronics and appliances stores, and sporting goods, hobby, book, and music stores combined increased by 0.8% seasonally adjusted from June, and leaped 6% over July 2002.
In addition, the U.S. Commerce Department reports that retail sales increased 1.4% seasonally adjusted for July, and 6.5% over last July. “Consumers are returning to the stores and, more importantly, they are buying,” NRF chief economist Rosalind Wells said in a statement. “July’s retail sales continue to demonstrate that the economy is recovering and that there is definite reason for optimism in the second half of the year.”
Among product categories, consumers’ continued interest in home improvement fueled growth of building material and garden equipment and supplies dealers, which enjoyed a 1.3% adjusted gain month-over-month and an 8.6% gain year-over-year. Electronics and appliances stores had 1.2% adjusted month-over-month gains, and 7.2% unadjusted year-over-year.
Spurred by summer clearances, clothing and clothing accessories stores had 0.8% adjusted month-over-month increases and 6.4% unadjusted year-over-year gains. The NRF projects that general merchandise sales will increase 4.3% in the third quarter and 4.7% in the fourth quarter.