Why US Retail Sales Increased More Than Expected in June

American shoppers ramped up their spending in June for the fourth month in a row — a solid finish to the quarter for U.S. retailers.

According to the Commerce Department, retail sales rose 0.4% last month, although economists forecasted an increase of just 0.1%. It’s a good sign for the economy, which faced turbulent times in the first few months of the year amid the protracted U.S.-China trade war, weaker business investments and a global manufacturing slump.

The higher than expected gain also came on the heels of a strong April and May, when sales growth also logged in at 0.4%. Among the sector’s biggest gains were clothing and clothing accessories stores, which grew 0.5%, as well as general merchandise stores, climbing 0.2%, and non-store retailers, with a 1.7% advance. (Department stores, on the other hand, slid 1.1%.)

Rising wages and low unemployment appear to be driving the boost. Last month, American employers added a robust 224,000 jobs, easing worries of a weakening labor market after May’s disappointing 75,000 new jobs. The unemployment rate edged slightly higher at 3.7% — still close to a 50-year low — while average hourly earnings climbed 3.1% from a year earlier and the labor force participation rate remained steady at 62.9%.

Despite the positive growth, global research firm Coresight Research still predicts a rise in the number of store closures this year ahead of the back-to-school and holiday shopping seasons. The firm reported that retailers across the U.S. have announced 7,062 store closures so far in 2019 — already exceeding the 5,864 closures for all of 2018. This year’s tally, it said, could top 12,000 by December, which would set a new record for the industry.

An ongoing decline in brick-and-mortar traffic has followed a consumer shift to digital shopping — led by e-commerce giants like Amazon — as well as a rise in spending on experiences like travel and dining. Retailers are also changing the face of the traditional mall (think New York City’s Hudson Yards and the soon-to-open American Dream in New Jersey), with experiential and personalized offerings among the ways to connect with today’s shoppers.

Watch FN’s interview with these shoe designers.

Want more?

Nearly Half of All Retail Sales Jobs May Soon Be Replaced by Automation

Retail Store Closures: All the Companies That Are Downsizing in 2019

More From Our Brands

Access exclusive content