Consumer spending on clothing, footwear and home goods bounced back in July after declining the previous month, new data released Friday by the U.S. Bureau of Economic Analysis (BEA) revealed.
Personal consumption expenditures (PCE) for clothing and footwear rose a seasonally adjusted 0.8 percent to $502.72 billion last month, while spending on furnishings and durable household equipment increased 1.2 percent to $497.24 billion.
The uptick in spending was somewhat similar to results reported in the July retail sales report from the Census Bureau. It showed clothing and clothing accessories store sales were down 0.6 percent month over month seasonally adjusted, but up 0.2 percent unadjusted year over year. Furniture and home furnishings store sales were up 0.2 percent for the month, but down 0.3 percent for the year.
“Retail sales grew in July, supported by declines in prices at the gas pump and moderately lower inflation,” Matthew Shows, president and CEO of the National Retail Federation (NRF), said. “Consumers are adapting to higher prices by prioritizing essentials like food and back-to-school items, and retailers are working hard to absorb the impact of higher costs and help customers stretch their hard-earned dollars.”
Overall PCE increased 0.1 percent, or $23.7 billion, for the month, reflecting a gain of $33.3 billion in spending for services that was partly offset by a decrease of $9.6 billion in spending for goods, BEA noted. Within services, the largest contributors to the increase were spending for housing and utilities, and international travel. Within goods, gasoline and other energy goods were the leading contributor to the decrease.
Real PCE, adjusted for inflation, increased 0.2 percent last month. Within goods, an increase in durable goods led by recreational goods and vehicles was partly offset by a decrease in nondurable goods led by gasoline and other energy goods, as well as by food and beverages. Within services, increases in housing and utilities and in transportation services were the leading contributors.
The PCE price index decreased 0.1 percent, as prices for goods dipped 0.4 percent and prices for services rose 0.1 percent. Food prices increased 1.3 percent and energy prices decreased 4.8 percent.
From the same month one year ago, the PCE price index for July was up 6.3 percent, as prices for goods increased 9.5 percent and prices for services rose 4.6 percent. Food prices rose 11.9 percent and energy prices increased 34.4 percent.
Excluding food and energy, the core PCE price index increased 0.1 percent in July. From a year earlier, the PCE core price index was up 4.6 percent.
Personal income increased 0.2 percent, or $47.0 billion, in July, according to BEA. Disposable personal income (DPI), a key barometer of retail spending, also increased 0.2 percent, or $37.6 billion. Real DPI increased 0.3 percent in July.
BEA said the increase in personal income in July primarily reflected an increase in compensation that was partly offset by decreases in proprietors’ income, personal current transfer receipts and rental income of persons. The increase in compensation was led by private wages and salaries. The decrease in personal current transfer receipts followed an increase in June that reflected a legal settlement from corporate business to persons.
Personal outlays rose $27 billion in July. Personal saving was $932.3 billion in July and the personal saving rate–personal saving as a percentage of disposable personal income–was 5.0 percent.