August retail sales down from July and up annually

August retail sales were down compared to July and up annually, according to data issued this week by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that August retail sales dropped 0.3 percent compared to July at $456.3 billion and were up 1.9 percent annually. Total sales for the June 2016-August 2016 period saw a 2.5 percent annual increase, and retail trade sales dropped 0.5 percent from July and were up 1.4 percent annually, said Commerce. Nonstore retailers saw a 10.9 percent annual gain, with health and personal care stores up 7.8 percent for the same period.

The NRF reported that retail sales, excluding automobiles, gas stations, and restaurants, were down 0.3 percent from July to August, with August up 4.1 percent annually.

“The pattern of summer slowing was evident last year and that is what we’re seeing again this year,” NRF Chief Economist Jack Kleinhenz wrote in a blog posting. “Despite this drop off, other indicators suggest that this is a temporary dip and that consumers will remain a driving force in the U.S. economy. Last month’s data may also reflect a drag from ongoing retail price declines that have affected the industry for several years. Rising incomes and steady employment gains should provide the fuel for spending as we look ahead to the holiday season.”

Earlier this year, the NRF said it is calling for 2016 retail industry sales, excluding automobiles, gas stations, and restaurants, to see a 3.1 percent annual increase.

While this estimate comes in higher than the 10-year average of 2.7 percent, it falls short of the NRF’s 2015 estimate of 4.1 percent. The Washington, D.C.-based organization also said it expects non-store sales to grow between 6-9 percent in 2016.

The NRF offered up some other metrics that it maintains point to a strong 2016 on the retail sales front, including:

• 2016 economic growth to be in the 1.9 percent-to-2.4 percent range; and

• An estimated 190,000 new jobs added per month, which is off from 2015 but consistent with a growing labor market

“Consumers are taking it slow in the third-quarter; much of the back-to-school shopping was done online and in July due to Amazon Prime Day,” observed Chris Christopher, Director of Consumer Economics, IHS Global Insight, in a research note. “Clothing stores and restaurants did well in August due to unseasonably hotter weather. In addition, consumers are learning that if they delay their third-quarter spending they can get a sweet deal in early November when holiday price discounting is deep.”