Car sales also fell sharply from the previous month… Inflation burden remains
Consumer spending, the backbone of the U.S. real economy, did not increase last month in the followingmath of a drop in gasoline prices and a sharp drop in car purchases, it was found.
The U.S. Department of Commerce said on the 17th that retail sales in July were the same as in the previous month.
This is a result that fell short of the forecast of experts compiled by Bloomberg (an increase of 0.1%).
It is analyzed that the main reasons for the slowdown in retail sales are the decline in gasoline prices and the sharp drop in car purchases by consumers as international oil prices stabilized following Russia’s invasion of Ukraine.
According to the Ministry of Commerce, gas station sales fell 1.8% from the previous month, and auto and parts dealer sales fell 1.6% from the previous month, respectively.
Instead, consumers seem to be spending the money they save on gasoline and cars elsewhere.
Excluding automobiles and gasoline, core retail sales rose 0.7% from the previous month, the Commerce Department said.
In particular, Internet sales increased by 2.7% from the previous month thanks to the ‘Amazon Prime Day’ discount event last month.
Although consumer price inflation has slowed slightly thanks to the recent drop in oil prices, it is expected that retail sales will not increase significantly for the time being, considering that US consumers are still suffering from high inflation.
Gasoline sales also decreased from the previous month, but surged 39.9% from the same month of the previous year when oil prices were low, suggesting that it is putting a heavy burden on consumers.
Consumption accounts for two-thirds of the US real economy and is accepted as a measure of overall economic health.
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