Retailers Were Resilient: July 14 – 19

Retailers had a good month in June while inflation picked up. Here are the five things we learned from U.S. economic data released during the week ending July 18.

Retail sales jumped in June. Retail and food services sales grew 0.6 percent to a seasonally adjusted $720.1 billion. The Census Bureau measure was up 3.9 percent from a year earlier. Q2 Retail sales were 4.1 percent ahead of the comparable 2024 months. Motor vehicle/parts dealers saw sales rise 1.2 percent, while gas station sales were unchanged. Net of both, core retail sales were up 0.6 percent in June and 4.1 percent year-over-year. Q2 core sales swelled 4.7 percent from a year earlier. During the month, sales grew at retailers focused on building materials (+0.9 percent), apparel (+0.9 percent), groceries (+0.5 percent), health/personal care (+0.5 percent), and sporting goods/hobbies (+0.2 percent). Restaurants/bars reported a 0.6 percent increase. Furniture stores and electronics/appliance retailers both saw sales slip 0.1 percent.

Consumer prices accelerated a bit in June… The Consumer Price Index (CPI) advanced a seasonally adjusted 0.3 percent for its largest monthly increase since January. The Bureau of Labor Statistics has CPI growing 2.7 percent over the past year. Prices for food (+0.3 percent) and energy (+0.9 percent) both rose for the month. Net of both, core CPI was up 0.2 percent in June and 2.9 percent year-to-year. During the month, prices increased for medical care services (+0.6 percent), apparel (+0.4 percent), shelter (+0.2 percent), transportation services (+0.2 percent), and medical care commodities (+0.1 percent). Prices declined for new (-0.3 percent) and used (-0.7 percent) vehicles.

…While wholesale prices remained in check. The Producer Price Index for final demand was unchanged in June after having grown 0.3 percent during the previous month. The Bureau of Labor Statistics measure has increased 2.3 percent over the past year. The core wholesale price index, which excludes food, energy, and trade services, also remained steady during the month and was up 2.5 percent year-over-year. Goods PPI jumped 0.3 percent, pushed up, in part, by food (+0.2 percent) and energy (+0.6 percent). Services PPI decreased 0.1 percent.

Manufacturing output wobbled again in June. The Federal Reserve reports manufacturing output increased a seasonally adjusted 0.1 percent following May’s 0.3 percent gain. Whereas durables production held steady (motor vehicles/parts: -2.6 percent), that of nondurables grew 0.3 percent. Overall industrial production gained 0.3 percent in June following two consecutive months being unchanged. Mining output slipped 0.3 percent, while hot, humid weather drove a 2.8 percent surge at utilities. Over the past year, manufacturing production has risen 0.8 percent, while overall industrial production was up 0.7 percent over the past year.

Consumer sentiment brightened slightly in early July. The University of Michigan’s Index of Consumer Sentiment added 1.1 points to a seasonally adjusted 61.8 (1966Q1=100). The index remained 6.9 percent below year-ago levels. The current conditions index improved 2.0 points to 66.8 (+6.5 percent versus July 2024), while the expectations measure increased by a half point to 58.6 (-14.8 percent versus July 2024). Consumers continued to lower their expectations for inflation, with one-year inflation at a still elevated +4.4 percent (down from +5.0 percent last month) and long-term inflation at +3.6 percent (versus +4.0 percent). The press release notes that inflation and trade policy were driving most survey respondents’ economic outlook.

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending July 12, 2025, First-Time Claims, seasonally adjusted): 221,000, -7,000 vs. the previous week, -19,000 vs. the same week a year earlier). 4-week moving average: 229,500 (-1.6% vs. the same week a year earlier).
• Import Prices (June 2025, All Imports, not seasonally adjusted): +0.1% vs. May 2025; -0.2% vs. June 2024. Nonfuel Imports: +0.1% vs. May 2025; +1.2% vs. June 2024.
• Export Prices (June 2025, All Exports, not seasonally adjusted): +0.5% vs. May 2025; +2.8% vs. June 2024. Nonagricultural Exports: +0.5% vs. May 2025; +2.9% vs. June 2024.
• Housing Starts (June 2025, Starts of Privately-Owned Homes, seasonally adjusted annualized rate): 1.321 million (+4.6% vs. May 2025; -0.5% vs. June 2024).
• Housing Market Index (July 2025, Index (>50 = More Homebuilders View the Housing Market as “Good” than “Poor,” seasonally adjusted): 33 (June 2025: 32; July 2024: 41).
• State Employment (June 2025, Nonfarm Payrolls, seasonally adjusted): Increased in 1 state and held steady in 49 states and the District of Columbia vs. May 2025. Increased in 15 states and held steady in 35 states and the District of Columbia vs. June 2024.
• Treasury International Capital Flows (May 2025, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$318.5 billion (April 2025: -$50.6 billion; May 2024: +$78.7 billion).
• Beige Book

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.