Retail Sales Brief: July 2024

Consumer Resiliency Apparent Despite Pullback in Discretionary Spending

Households' priorities reflected in recent gains. For a second straight month, consumers set a new high for core retail sales, with spending up 3.8 percent year over year in June. This improvement closed out a first half that saw core spending rise 3.2 percent when compared to the same period of 2023. During this span, consumers prioritized experiences, discounts and essential items, as reflected in gains recorded across the online, restaurant, grocery, health and personal care categories. Many households, concurrently, scaled back on discretionary purchases, adversely impacting furniture, electronics and appliance retailers. The retail sector, however, is poised to weather this headwind. While consumers shift priorities around, overall annual personal income topped $23.9 trillion in May, the second-highest mark on record, indicating that, in aggregate, households are in relatively strong financial positions. Additionally, widespread demand for space is evident, with a group of retailers carrying out expansion plans.

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