• Sales to moderate but remain positive
  • Labor economy underpins consumption
  • Disposable income gains should provide spending

The US Census Bureau will release its advance Monthly Sales for Retail and Food Services for June at 8:30 am EDT, 12:30 GMT on Tuesday July 16th.


Retail sales are expected to gain 0.1% in June after adding 0.5% in May.  Sales excluding automobiles are predicted to increase 0.1% after May’s 0.5% jump. The control group, sales minus building materials, motor vehicles and parts and gasoline and food service receipts, which is used to calculate the personal consumption expenditure component of GDP, is forecast to rise 0.3% after a revised 0.4% increase in May, initially issued at 0.5%.

Retail Sales, GDP and the labor market

Though US economic growth appears to have shifted lower in the second quarter, the Atlanta Fed GDPNow estimate was 1.4% on July 10th the labor market remains strong.

Wages were 3.1% higher on the year in June and with PCE inflation running at 1.5% in May that represents a healthy rise in disposable income. Non-farm payrolls added 224,000 new positions relieving concerns that the weak February and May results were the forerunners of a slower trend in job creation.

Manufacturing payrolls rose by 17,000 their largest increase since January, though the 12-month moving average has declined from 24,166 last July, its best average in over two decades, to 13,916 in June.  With unemployment at a 50 year low of 3.7% and the economy continuing to register record employment for black and Hispanic workers the positive impact of the labor market on retail sales should keep consumption buoyant.


Initial Jobless claims remain, like the unemployment rate, near five decade lows.

Business Sentiment

Business executives throughout the economy have recovered some of their optimism towards new employees in the past three months with the employment PMI figures in the manufacturing sector seeing the sharpest rise.  Hiring plans have cooled since their post-recession highs in the second half of last year, but as depicted in the initial jobless claim no one has firing on their minds.

Consumer Sentiment

Consumer attitudes have also returned from their government shutdown inspired dip in the early part of the year. The Michigan Survey of Consumer Sentiment scored  97.9 in June, which, though down from May’s 15 year record of 102.9 is at the upper end of the readings from the last two years, themselves the best in more than 20.



The fundamentals of the consumer economy remain healthy, with  jobs, wages and sentiment all at positive levels. The concerns generated by the China trade dispute may have dimmed business sentiment but retail sales are likely to adhere to the optimism of the US consumer.



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