US Consumer Spending Robust Amid Trade War

RAPAPORT… US retail sales increased in July, as consumer confidence remained strong despite fears over the escalating trade war.



Total purchases— excluding automobiles, gasoline and
restaurants — rose 0.9% compared with June sales and 5.6% year on year,
according to data the National Retail Federation (NRF) reported, citing the US
Census Bureau. Online and other non-store sales climbed 19% year on year, the NRF
noted.

“July’s strong results are consistent with a confident
consumer,” NRF chief economist Jack Kleinhenz said last week. “Households are
in good shape with spending and that should continue as long as the labor
market remains healthy.”


However, the numbers reflect the period before US President
Donald Trump’s implementation of the most recent set of tariffs. While some
taxes on consumer goods imported from China have been delayed until December
15, it was announced earlier this month that levies on other items would go
into effect September 1.


“It’s important to remember that today’s data is looking
backward at what was happening a month ago,” Kleinhenz explained. “The impact
of volatile financial markets and increased trade tensions in recent weeks may
put a wind of caution in consumer spending as we move forward in 2019.”


Image: A woman paying for purchases at a store. (Shutterstock)