However, data released Tuesday (Sept. 16) by the Census Bureau also contained mixed signals. A few categories notched declines, and data released in a separate report earlier this week signaled intent by households to slow their pace of spending in the months ahead.
The Tuesday data showed that advance estimates of retail and food services sales in the United States in August, adjusted for seasonal variation and holiday and trading-day differences but not for price changes, were up 0.6% from the previous month and up 5% from August 2024.
The monthly rise in the advance indicator is virtually unchanged compared to the July increase and represents a slowdown, at least somewhat, from June’s 1% rise.
Double-Digit Gains Year Over Year and Online
Nonstore retailers, a broad category that includes but is not limited to online platforms and merchants, saw the most growth, up 10.1% from last year. They were up 2% from July’s level, representing the highest gain of any spending category tracked in the report, as calculated on a month-to-month basis.
There seems to have been a surge to dine out last month, as sales at food service and drinking places were up 6.5% from last year, and 0.7% higher than in July. Of the categories that saw declines, spending on health and beauty supplies slipped 0.1% during the month compared to July.
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These figures indicate some degree of resilience, with three consecutive monthly increases in retail trade sales.
However, the August survey of household spending, released Monday (Sept. 15) by the Federal Reserve, indicated that households expect spending to continue rising but at a slower pace, with the median 12-month expectation at 3%. Expected growth in essential spending remained nearly steady at 4.7%. It is true that some of this increment is explained by nonretail verticals such as utilities and education, which showed the largest expected increases. Other segments like clothing declined, which may provide a bigger alert.
The data from the central bank indicated that 60.8% of households made a “large purchase” over the past four months, an increase from 53.5% in April when the previous survey was conducted and the highest level since August 2023, after two consecutive declines. Within segments, electronics were the only category of large purchases where households expected higher spending ahead compared to their expectations in April.
That bodes well for at least some retailers, including juggernauts such as Amazon and Walmart, ahead of the holiday season, at least in those categories and particularly as Black Friday and other promotions loom.
The PYMNTS Intelligence report “Subscription Surge: Consumers Use Walmart+ and Amazon Prime” found that nearly a quarter of consumers held subscriptions from both Amazon Prime and Walmart+, using them to “unlock cost savings through free and fast shipping, gain access to exclusive discounts, and benefit from added services. This trend underscores a proactive consumer desire to compare prices across platforms, capitalize on diverse perks and ultimately secure the best deals.”
