Retail sales rose 0.2% from May to June, following a revised 0.5% increase the previous month, the Commerce Department reported Tuesday. The figure matched the pace of consumer inflation in June from the prior month, underscoring that shoppers are just about keeping up with pricing pressures. While the headline number of 0.2% was a bit weaker than expected, economists focused on the number that excludes volatile autos, gas, building materials and food services, which rose a solid 0.6% in June.
“While they continue to spend, the June retail sales report suggests that consumers are becoming more thoughtful with their purchases,” wrote Oren Klachkin, U.S economist at Oxford Economics. He pointed to the labor market losing some momentum, declining savings, and interest rates that have made borrowing money or using credit cards more expensive.
That gave companies “abnormal power to push up prices’’ and pass higher costs along to consumers – clout they hadn’t had for decades, Simon MacAdam, senior global economist at Capital Economics, wrote last month.Low interest rates are long gone: The Federal Reserve began aggressively hiking rates in March 2022. The student loan moratorium – which allowed Americans to divert money that used to go to loan payments to dinners out and new furniture – ends later this year.
Now, he keeps track of the coupons in the Target and Walmart apps, scours the grocery aisles for deals on meat and buys store-brand canned goods.There are a handful of brands he loves and won’t substitute, like his Mountain Dew sodas. But he is looking for cheaper alternates almost everywhere else.