July 17, 2025
June Retail Sales - Broad Advance
In nominal terms, U.S. retail sales advanced 3.9% year-over-year and 0.6% month-over-month. Adjusting for inflation, spending advanced 1.2% year-over-year and 0.3% month-over-month. The broad advance led by healthy increases on motor vehicles and restaurants likely tempers concerns about a consumer slowdown. That said, the June report likely reflects normalization as opposed to a notable uptick. Remember, in March and April, consumers rushed to make big-ticket purchases in an effort to get out ahead of potential tariffs. At the time, we noted that elevated spending would likely be followed by more subdued period which is what we observed in May. In June, we saw healthy growth on a relatively easy prior-month comparison. While the trade policy narrative has generally evolved favorably since liberation day, the eventual breadth and severity of tariffs remains uncertain and has weighed on consumer and business sentiment in the first half of 2025. For Federal Reserve officials it is still an open question as to whether tariffs will cause a one-time hit to prices or prove more persistent. Policymakers have kept interest rates steady in the meantime and are expected to do so again when they meet later this month.
- Real (inflation adjusted) retail sales advanced 1.2% year-over-year. In June, retail sales grew 3.9% nominally netting real growth of 1.2% after adjusting for 2.7% inflation. Higher spending at brick-and-mortar retailers (+8.5%) and on restaurant dining (+6.6%) and motor vehicles (+6.5%) was partially offset by a declines at the pump (-4.4%). Eight of thirteen categories advanced in real terms.
- Real (inflation adjusted) retail sales advanced 0.3% month-over-month. In June, nominal retail sales levels grew 0.6% compared to May, well above forecasts for 0.1% growth and netting real growth of 0.3% after adjusting for 0.3% inflation in the month. Higher spending at brick-and-mortar retailers (+1.8%) and on motor vehicles (+1.2%) was partially offset by a flat month at the pump (+0.0%). Four of thirteen categories advanced in real terms.
