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US July retail sales flat on cautious consumer although apparel sales rise

US retail sales were flat in July as consumer spending remained weak despite an improving jobs market, the Commerce Department said Wednesday. On the upside Americans spent more on apparel last month, but they also cut back on department store purchases. Excluding autos, retail sales ticked up 0.1% month-on-month in July, falling short of the 0.2% rise analysts had expected. July was the weakest reading for retail sales since the winter storms hit sales in January. Retail sales rose 3.7% year-on-year in July, slipping from a 4.3% on-year gain in June.

Retail sales for the May-July quarter were up 4.2%.

Department store sales dipped a seasonally adjusted 0.7% to $13.8bn last month, while sales at general merchandise stores fell 0.5% to $55bn. Apparel and accessories stores posted a 0.4% sales gain to $21.2bn in July. Furniture store sales fell 0.1%.

Grocery sales rose 0.2% and there was also a 0.2% increase at restaurants and bars. Motor-vehicle and parts sales fell a seasonally adjusted 0.2% month-on-month.

Wednesday’s report also included more data on previous months. Retail sales rose 0.2% in June from the prior month, which was unchanged from an earlier Commerce Department estimate, but May’s sales increase was put at 0.4%, revised down from a previously estimated 0.5% hike.

Analysts blamed the overall weak sales on weak pay rises.

Average weekly earnings, adjusted for inflation, fell 0.2% in the year ended June, according to data from the Bureau of Labor Statistics, the largest dip since October 2012. However, average hourly earnings in July rose 2% on-year, still in line with the sluggish trend of recent years, the Labor Department said earlier this month.

Prices are also rising, with the closely watched consumer-price index up 2.1% year-on-year in June, the Labor Department also said last month.

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