Retail sales hit $507.5 billion in July, representing a 0.5% increase over the previous month and a 6.4% boost over July 2017, according to the Census Bureau.
The performance continues the positive momentum the economy has enjoyed this year.
Both department and clothing stores had a good month. The former saw a 1.2% uptick to $11.4 billion over the previous month, while the latter increased 1.3% to $21.9 billion over June. In fact, clothing stores were up 6.4% year-on-year.
Gas prices leapt 22.2% over July 2017, while non-store sales, which are primarily e-commerce transactions, increased by 8.7% during the same period last year. The food service industry also saw a healthy gain, advancing 9.7% year-on-year. Only the sporting goods/hobby sector faltered with a 4.9% decline from last July.
Ahead of the July report, the National Retail Federation had already adjusted its forecast up for 2018 retail sales. Previously, the group had forecast sales to be up between 3.8% and 4.4% over 2017, but on Monday, NRF said it expects retail sales, excluding cars, gas and restaurants, to increase by at least 4.5%.
“Higher wages, gains in disposable income, a strong job market and record-high household net worth have all set the stage for very robust growth in the nation’s consumer-driven economy,” NRF president and CEO Matthew Shay said, crediting tax reform for creating a windfall for consumers.
Though 2018 is shaping up to be better than the group had expected, Shay said “uncertainty” around inflation and trade threaten what could otherwise be a rosy outcome. Shay added that the longer the trade war persists, the more likely ill effects will be felt.
“With retailers ramping up imports and stocking their warehouses before most of the proposed tariffs will take effect, an immediate impact on prices on consumer goods is unlikely, but that won’t last for long,” he said.
Retail sales in June, while still positive, were revised down from a 0.5% increase to a 0.2% increase.