US retail sales increased in July, as consumers continued to spend despite fears over the escalating trade war.
Total purchases — excluding automobiles, gasoline and restaurants — rose 0.4% over June sales and 4.9% year on year, according to data the National Retail Federation (NRF) reported, citing the US Census Bureau. Online and other non-store sales climbed 11.3% year on year, the NRF noted.
“[The] numbers mirror the economy, which is in very good shape,” NRF chief economist Jack Kleinhenz said last week. “Consumer fundamentals remain healthy and continue to provide wherewithal for consumers to drive domestic economic growth.”
The positive trend was also noted in the earnings reports of various department stores for the second quarter, which closed at the end of July, with jewelry listed among the growth products.
“The retail environment remained strong in the first half of the year,” said Jeff Gennette, Macy’s CEO. “Sales were buoyed by strong consumer sentiment and good spending across all retail categories.”
Comparable-store sales — for locations open more than a year — were up 0.5% year on year in the second quarter at Macy’s, with the strongest growth in the fine jewelry, fragrances, active, dresses, kids’, men’s, luggage and furniture categories.
July comparable sales were ahead of J.C. Penney’s original forecast, rising 0.3% year on year in the second quarter, Jeffrey Davis, the company’s chief financial officer said. Children’s, jewelry, Sephora, women’s apparel and salon were the top performing divisions, Davis added.
The NRF recently revised its annual forecast for 2018. The organization now expects retail sales for the year to grow at least 4.5% over 2017, rather than its original prediction of 3.8% to 4.4% growth.
However, future spending may be affected if tariffs escalate, noted Kleinhenz.