The growth in retail sales goes along with high consumer confidence. As long as people have jobs they will spend.
Retail sales, which are adjusted for seasonality but not inflation, rose 0.7% in July from the prior month, the Commerce Department reported Tuesday. That was a faster pace than the previous month’s upwardly revised 0.3% gain and above economists’ expectations of a 0.4% rise, according to Refinitiv.
Spending rose on nondurable items, such as clothing and sporting goods. Sales at restaurants and bars rose a robust 1.4% in July from June.
Meanwhile, sales of durable goods — defined as products meant to last at least three years — slipped. Sales at furniture stores fell 1.8% in July from June and declined 1.3% at electronics and appliance stores during the same period.
Today’s WSJ notes that the increase in retail sales is the 4th month in a row for increases.
Not all sectors participated equally, of course. Rents seem to be plateauing, gas is coming back up, and housing is a market-by-market issue - but in mainline retail it’s generally good news. (Home Depot an exception; the company says inflation is causing people to put off larger projects and focus on smaller ones, which impacts them.)
According to the headlines, Target had a stinky report too. The headlines ascribe the shortfall, at least in part, to Target being painted as “woke”. As we have been discussing, reactionary thought police are a threat that companies in the US haven’t had to worry about too much, since the 50s when McCarthyism ruled.
Fifth month in a row for increases. It seems as long as people have jobs they will spend.
August retail sales were stronger than the month prior, underscoring how the US consumer has remained resilient despite rising interest rates.
Retail sales rose 0.6% in August from the previous month, above Wall Street’s estimates for 0.1% growth. Sales excluding auto and gas increased 0.2%, above estimates for a 0.1% decline compiled by Bloomberg.
Has anyone ever published spending stats in terms of “stuff” rather than in terms of dollars? I wonder if people are buying the same amount of stuff but spending more dollars to buy it, either due to inflation or due to the mix of things they choose to buy (probably a combination of both).
If the above (same amount of stuff, higher dollars) is true, then this could also be stated as “as long as people want to eat, they will spend”.
Is any data published showing how much credit card companies are raising limits on people’s cards? The auto industry has enabled it’s price escalation by financing for ever increasing terms, to keep the monthly payment “affordable”. Continued general consumer spending could also be enabled by letting people get farther in debt.
Home Depot is the fifth largest retailer in the country, behind only WalMart, Amazon, Costco and Kroger. More to the point, it occupies a different segment of “retail” than WalMart, Amazon and Costco, so their sales figures take on a separate importance, not just in size but also in understanding other trends in the consumer space.
Kroger, of course, is groceries, a fairly reliable and predictable number in good times and bad. Home Depot’s take on “larger projects” may be telling in a way that numbers from Target or WalMart are not.
So, if the average card holder has $5.7k in debt, and a card limit of $28.9K. then he has plenty of room to go farther in debt. The average card holder doesn’t even need to make a significant payment from current cash flow. The financially clueless can do what my dad was doing: take a cash advance on one card, to make the minimum payment on the other cards.
What matters is when the interest charges start. On a cash advance, it can be from the moment of the cash advance. Purchases historically gave until the statement due date, but I have heard of some that started on the day of each purchase (so zero days “free ride”).
Difficult to tell. The article does make reference to this possibility:
While the study does not provide numbers for the average credit card balance per consumer, we know, thanks to recent numbers put out by Transunion, that this figure rose from $5,010 in Q1 2022 to $5,733 in Q1 2023.
Not a large dollar amount but it does represent a 14% increase. Note, a median amount would likely be more more relevant than an average.