Growth of Retail Trade Begins in Conditions of Inflation

• Consumer spending may decline due to the increase in inflation-adjusted wages.
• Retail sales growth in July was 6% due to summer promotions.
• Consumer credit debt reached record levels.

The situation in the retail market in the USA demonstrates complex trends. While sales remain stable, there are indications that consumers may not have the ability to cope with rising prices. According to data from the Bureau of Labor Statistics, wage growth slowed from 3.7% in June to 1.2% in July. This may impact retail spending by consumers.

Retail sales in June increased by 3.4%, reaching $3.6 trillion, but experts believe that part of this growth may be a result of prior purchases before possible price increases due to tariffs. The National Retail Federation reported a 6% increase in core retail sales in July compared to the previous year, which could lead to increased summer promotional activities.

Inflation in July rose by 2.7% compared to last year, which corresponds to predictions, but core inflation, excluding food and energy prices, increased by 3.1%. This cyclical increase in service prices, such as medical care and transportation, contrasts with food product prices, which rose only by 2.2%. Meanwhile, some categories of goods, such as home technology and clothing, reported price decreases.

Consumer credit debt reached $1.21 trillion in the second quarter, which indicates a significant increase. Consumers are increasingly using credit cards for everyday expenses due to inflationary pressure.

Economists believe that further price increases may arise from new tariffs, which affect imports from over 60 countries. This could be an important factor in the future, especially considering that consumers are already feeling the pressure of rising prices.

Tags: USA/Economy