Economy

US Retail Sales Gains Still Slowing, Even Among E-Commerce Stores

Alex Potemkin / iStock via Getty Images

The U.S. economy improved in August, but month-over-month gains continue to lose pace following a record gain in May. According to the Census Bureau’s advance monthly report on retail and food services sales, total sales rose by 0.6% month over month, below the revised estimate of a 0.9% increase between June and July.

Consensus estimates from Econoday called for a month-over-month increase of 1.0% and an increase of 1.0% excluding automobiles, parts and gasoline. The advance estimate excluding autos, parts and gasoline came in with a gain of 0.7%.

Non-store retailers (i.e., e-commerce) posted a 19.6% year-over-year gain in sales for the first eight months of 2020, compared to the same period last year. Interestingly, however, digital sales slipped slightly month over month from $81.7 billion in July to $78.3 billion in August. The decline is consistent with the trend reported earlier this week by Adobe Analytics.

Compared with August of 2019, last month’s e-commerce sales were 22.4% higher, less than the 23.4% difference between July 2019 and July 2020. As retail stores reopen, consumers are returning, even if only in modest numbers.

The U.S. economic rebound began in May with a month-over-month gain of a record 18.2%. That declined to 8.4% between May and June and 0.9% in between June and July. The economy is still growing, but increasingly slowly.

The largest year-over-year declines occurred in clothing and accessories sales, down 20.4% and restaurant/bar sales and gasoline sales, both down by 15.4% although all posted higher month-over-month sales in August.

Excluding automobile, auto parts and gasoline sales, total retail sales in August rose by 4.0% year over year, up from a 3.5% increase year over year in July.

Auto sales increased by 0.2% month over month in August, after falling by 1.0% in July. Year over year, auto sales rose by 4.5% in August, compared to an annual increase of 6.3% in July.

Department store sales have dropped by 18.9% year over year for the first eight months of 2020. Compared to August 2019 totals, department store sales fell by 16.9% last month. Month over month, sales dipped by 2.3%.

Sales at building materials and home/garden stores are up 11.4% for the first eight months of the year and were 15.4% higher year over year in August.

Electronics and appliance stores posted a month over month gain of 0.8% but a 2.5% decline year over year for the month. For the first eight months of the year, sales are down 16.8% compared with the first eight months of last year.

A bright spot for the economy was sales at electronics and appliance stores. July sales rose 22.9% compared to June, and June sales were up 37.4% over May. Year over year, electronics and appliance sales were down just 2.8% in July, compared to a year-over-year decline of 12.7% in June.

Unemployment remains high at around 14 million, and there is no sign of a congressional agreement on whether or how much to offer expanded benefits. Without consumers who have money to spend, sales growth is unlikely to return.

Buffett Missed These Two…

Warren Buffett loves dividend stocks, and has stuffed Berkshire with some of his favorites.

But he overlooked two dividend legends that continue to print checks on a new level, they’re nowhere in his portfolio.

Unlock the two dividend legends Buffett missed in this new free report.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.