The retail rebound lost some momentum in July as consumers came back, but not all the way.
Total July retail and food service sales rose a seasonally adjusted 1.2 percent compared with June and were up 2.7 percent from a year earlier. Economists, however, were looking for more having projected a 2 percent gain after June’s 7.5 percent rebound.
Apparel and accessories specialty store sales increased 5.7 percent from June, but were still down 20.5 percent from a year earlier. And department stores limped forward, logging a 0.1 percent increase from June, but a year-over-year drop of 13.4 percent.
Non-store retailers, a category that includes e-commerce, continued to gain as shoppers stayed closer to home. July sales in the category rose 0.7 percent from June, marking a 24.7 percent increase from a year earlier.
While life has returned to something more like normal compared with the nearly complete shutdown seen in the spring, the coronavirus is still a clear and present danger. And consumers might now be adjusting their attitudes for the long haul, especially with unemployment at a historically high 10.2 percent. Extra unemployment support from the government, which had been propping up consumers, has lapsed and replacement programs caught up in grinding negotiations on Capitol Hill.
The Refinitiv/Ipsos Primary Consumer Sentiment Index fell 2.5 percent this month to 47.1, according to the latest reading on Friday. Confidence was flat between June and July, suggesting something has shifted in consumer psychology.
“Consumer confidence among Americans has resumed a downward trend during the pandemic after holding steady last month,” said Chris Jackson, senior vice president, U.S., Public Affairs, at Ipsos. “As new virus hot spots have fully established themselves across the country, American consumer confidence is reflecting the impact. While many consumers are embracing a new normal, it has become increasingly difficult for them to maintain confidence as the virus rages and unemployment numbers are at levels unparalleled in the last decade.”