Tumbling gas prices at the pump were not enough to boost retail sales in July, which remained unchanged from June’s level of 0.8%, revised downward from 1%, as record-high inflation and rising interest rates continue to wreak havoc on household budgets and businesses’ bottom lines.
Monthly sales in July, which aren’t adjusted for price changes, totaled $683 billion, according to the U.S. Census Bureau report on Wednesday (Aug. 17). Consumer spending accounts for nearly 70% of economic activity and the monthly report includes sales from 13 types of food service and retail stores.
While the job market remains robust, wage hikes haven’t kept up with inflation, prompting consumers to concentrate their spending on essentials like groceries and away from discretionary items like electronics. The report covers about one-third of all consumer purchases, leaving out most service-related spending like travel, entertainment, medical care and rent.
The government’s monthly report on retail sales covers about a third of all consumer purchases and doesn’t include spending on most services ranging from plane fares and apartment rents to movie tickets and doctor visits.
The average price for a gallon of regular gasoline is down more than $1 to $3.94 from a mid-June high of $5.01, according to AAA data. A month ago, the average price was $4.53 compared to last July’s $3.18 average per gallon price.
Close to 6 in 10 (58%) Americans were living paycheck to paycheck in May 2022, according to PYMNTS data, a 4 point increase from May 2021. That data now includes nearly 1 in 3 respondents making $250,000 or more annually.
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