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American Consumers Continue to Buy Despite Inflation

Mike Schuler
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September 15, 2022

American consumers are continuing to spend their money on retail goods despite persistent inflation and rising interest rates, the National Retail Federation said Thursday.

Jobs and higher wages helped to ease some of the pressure of rising prices, with overall retail sales in August increasing 0.3 percent from July and up 9.1 percent year-over-over, according to U.S. Census Bureau numbers. That compared with a month-over-month decline of 0.4 percent and a year-over-year increase of 10.1 percent in July. On a three-month moving average, sales were up 9.3 percent year over year.

Strong consumer spending throughout the pandemic has fueled record imports that have overwhelmed U.S. ports, causing freight rates to soar and contributing to inflation.

“August retail sales show consumers’ resiliency to spend on household priorities despite persistent inflation and rising interest rates,” said Matthew Shay, NRF President and CEO. “As we gear up for the holiday season, consumers are seeking value to make their dollars stretch. Retailers have been hard at work managing their supply chains and holiday inventories to provide consumers with great products, competitive prices and convenience at every opportunity.”

Shay said he was relieved and “cautiously optimistic” on news that a nationwide rail strike has been averted, expressing appreciation to the Biden Administration for its intervention and efforts to avert the crisis.

Household spending remains steady even as costs continue to rise, according NRF Chief Economist Jack Kleinhenz.

“Consumers continuing to spend more each month points to the benefits of strong job and wage growth and their use of pandemic savings to help handle persistent elevated prices,” said Kleinhenz. “Consumers are showing their toughness, but they have limited options and cannot continue if prices do not begin to soften. This retail sales report comes amid mixed signals from the broader economy that show the headwinds against the consumer are strengthening.”

According to the NRF’s calculation of retail sales, which excludes automobile dealers, gasoline stations and restaurants to focus on core retail, August was up 0.1 percent from July and up 8 percent unadjusted year over year. In July, sales were up 0.5 percent month over month and up 7.2 percent year over year.

NRF’s numbers were up 7.3 percent unadjusted year over year on a three-month moving average as of August. Sales were up 7.5 percent year over year for the first eight months of the year, keeping results on track with NRF’s forecast that 2022 retail sales will grow between 6 percent and 8 percent over 2021.

August sales were up in all but one retail category on a yearly basis, led by building material stores, online sales and grocery stores, and increased in all but four categories on a monthly basis. Specifics from key sectors include:

  • Building materials and garden supply stores were up 1.1 percent month over month seasonally adjusted and up 13.4 percent unadjusted year over year.
  • Online and other non-store sales were down 0.7 percent month over month seasonally adjusted but up 12.3 percent unadjusted year over year.
  • Grocery and beverage stores were up 0.5 percent month over month seasonally adjusted and up 8 percent unadjusted year over year.
  • Sporting goods stores were up 0.5 percent month over month seasonally adjusted and up 7.1 percent unadjusted year over year.
  • Clothing and clothing accessory stores were up 0.4 percent month over month seasonally adjusted and up 3.7 percent unadjusted year over year.
  • Health and personal care stores were down 0.6 percent month over month seasonally adjusted but up 3.7 percent unadjusted year over year.
  • General merchandise stores were up 0.5 percent month over month seasonally adjusted and up 3.2 percent unadjusted year over year.
  • Furniture and home furnishings stores were down 1.3 percent month over month seasonally adjusted but up 0.1 percent unadjusted year over year.
  • Electronics and appliance stores were down 0.1 percent month over month seasonally adjusted and down 5.2 percent unadjusted year over year.

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