Where Oh Where Are The Shoppers?

Temperatures have gone up, and while it is difficult to argue that the weather is not better than it was nationwide in February—unless one happens to live in Tornado Alley—recent releases on retail spending would seem to indicate that consumer enthusiasm toward shopping hasn’t quite yet fully thawed.

Retail sales climbed a scant 0.2 percent in June, which would represent the smallest gain since January, according to the Commerce Department.  That growth improves to 0.4 percent when auto sales are factored out.

The latest performance showed consumers were spending money in restaurants, clothing outlets and department stores, while purchases of cars, furniture and building materials fell.  This reverses the trend of previous months, where cars and furniture pushed retail sales, while smaller outlays lagged.

The figures indicate that the economy isn’t yet hitting on all cylinders, as consumers are still making purchasing trade-offs.

“It’s about as good as you can hope for given where you are in terms of household incomes,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told The Wall Street Journal on last month’s sales increase. Still, he expects “it’s just a matter of time, and probably not much time at all, that wage growth starts to turn higher.”

On the upside, the report did show that May’s retail figures were higher than originally reported, indicating that Q2 saw moderate overall growth in retail sales, which was certainly an improvement over Q1’s abysmal and largely snow driver results.