HomeIndustriesU.S Retail Sales Remain Unchanged Following Gas Price Drop

U.S Retail Sales Remain Unchanged Following Gas Price Drop

The Commerce Department reported on Wednesday that U.S. retail sales remained unchanged in July, despite the recent decline in gasoline prices. Retail sales increased by a marginal 0.8% the previous month. This figure excludes automobiles, building materials, gasoline, and food services.

Sales were largely in line with economists’ forecast of a 0.1% increase, with individual estimates ranging from a 0.3% decline to a 0.9% increase. Despite the stagnating retail sales figures, commercial spending seems to be holding up, thereby subduing fears that an economic recession is already underway.

The decline in gasoline prices has helped to ease anxiety, with the national average gasoline price dropping to $4.27 per gallon during the last week of July. This price decline provided consumers with much relief, particularly after gas prices nationwide hit an all-time high above $5 per gallon in mid-June.

Consumer spending during the second quarter grew at its slowest growth rate in the last two years, thereby resulting in a second consecutive quarter of GDP contraction. This is largely attributed to the recent inflation spike, thereby making consumers more price sensitive. With consumers becoming more hesitant to make impulse purchases, retailers find themselves with uncommonly high inventory levels.

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