The U.S. Department of Commerce reported that retail sales fell 1.1% in July due to concerns about the mutation of the Coronavirus Delta, which curbed spending.
As American consumers shifted spending to restaurants, bars, and gas stations while others stayed at home, and because the delta variant of the coronavirus surged in parts of the country, US retail sales fell in July.
US Department of Commerce data shows that retail sales in July fell 1.1% from June show Tuesday. Retail sales were revised up by 0.7% in June.
Data show that retail trade sales fell 1.5% from June, but still increased by 13.3% from the same period last year.
In 2020, clothing and clothing accessories stores increased by 43.4% year-on-year, while restaurants and bars increased by 38.4% year-on-year, indicating that the US economy is continuing to recover from the worst days of the coronavirus pandemic.
Sales of auto and parts dealers fell by 3.9% in July after a 2.2% decline in June, dragged down by limited inventory and rising prices.
The attitude towards outdoor activities triggered by the warm summer weather in the United States also had an impact on e-commerce. E-commerce fell by 3.1% in July, a significant slowdown compared with the previous month.
The decline in retail sales shows that consumers are more cautious about how and where to open their wallets, and concerns about rising inflation may also curb spending.
Goldman Sachs analyst Jan Hatzius said in a report: “The details of the retail sales report show that the pace of consumption accelerated in the second quarter, but that the slowdown in disposable income and the arrival of the Delta variable had a more significant drag on the third quarter.” Please pay attention to Tuesday morning.
Following weaker-than-expected earnings reports from major retailers Home Depot and Wal-Mart, the Dow Jones and Standard & Poor’s 500 indexes fell from Wall Street’s historical highs.
Home Depot shares fell 4.6% after the company showed weak US same-store sales for the first time in two years. The decline marked the cooling of the home renovation boom, which peaked during the lockdown period during the pandemic as Americans devote themselves to do-it-yourself home renovation projects.
Home Depot’s sluggish earnings report also caused the share price of its smaller competitor, Lowe’s, to fall 4.4%.
The share price of Walmart, the world’s largest retailer, fell 0.3% even after raising its annual US same-store sales forecast. But analysts pointed out that just because Americans do not consume in retail stores, it does not mean that they do not consume.
Lydia Boussour, chief U.S. economist at the Oxford Economics Institute, said in a report: “Although retail sales reports are usually a reliable indicator of consumer health, as consumers Spending has shifted to the service industry, and it continues to provide an incomplete picture.” Tuesday.
The Standard & Poor’s 500 Index and the Dow Jones Industrial Average closed at a record high on Monday as investors continued to balance optimism about a strong economic recovery and worries about the return of COVID-19 cases.