By  on July 15, 2014

WASHINGTON — Sales at specialty chains, department stores and general merchandisers rose across the board in June, in line with a modest increase in retail sales in the overall economy, the Commerce Department’s monthly report showed Tuesday.

Apparel and accessories stores posted a seasonally adjusted 0.8 percent increase in sales to $21.2 billion last month, while department store sales gained 0.2 percent to $14.1 billion. Sales at general merchandise stores, a category that includes department stores, rose 1.1 percent to $56 billion in June.

“It was clearly a good month for apparel and accessories stores, up 0.8 percent,” said Scott Hoyt, senior director of consumer economics at Moody’s Analytics. “Things seem to be picking up for this segment.”
Hoyt noted that year-over-year sales growth was 2.9 percent, the strongest uptick since October.

“The trend is very favorable for apparel and accessories stores, which have had three big months of growth out of the last four,” Hoyt said.

The same trend holds true for general merchandise stores, which posted a 3.4 percent sales gain compared with June 2013, Hoyt said. Although department stores saw a 0.1 percent year-to-year decline, it is an improving trend because the pace of declines is slowing, he noted.

“June retail sales reinforce the renewed strength of consumer confidence and marked increases in retail employment over the last few months,” said Jack Kleinhenz, chief economist at the National Retail Federation. “The upward revisions in April and May have provided positive signs of momentum for second-quarter growth after a dismal first quarter.”

In the overall economy, retail sales rose 0.2 percent to $439.9 billion in June, falling slightly below economists’ expectations.

Chris G. Christopher, director of consumer economics at IHS Global Insight, and Kristin Reynolds, U.S. economist at IHS, said in a note: “While the employment picture is looking more positive, food and gasoline price increases are starting to pinch. This could constrain future spending growth”; however, “retail sales used to estimate consumer spending are looking better for the second quarter as the result of upward revisions.”

Christopher and Reynolds said they expect the back-to-school season to improve, with growth in the range of 3 to 4 percent compared to last year, “as consumer confidence remains elevated, if not erratic, and employment gains continue to keep pace.”

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