While the US Labor Dept. reported increased employee-hiring in June, the US Commerce Dept. reported that consumers boosted retail sales for the month. Even more interesting is that the increased consumer spending took place despite price inflation, in which prices of goods rose by up to 5.4% coming from last year’s prices of consumer goods and services.
The June spike in retail sales indicated a strong demand for consumer goods, as the Commerce Dept. reports show that spenders have also shifted to paying for services, which accelerated the growth of retail sales in the 2nd quarter of 2021.
Inflation was said to be triggered by the motor vehicle market’s inability to meet the consumers’ growing demand due to global shortage of semiconductors. Nonetheless, the lack simply directed the vehicle-buying public to the used-cars market, and as a result boosted the sale of used trucks and automobiles.
Much to the delight of many retailers they are seeing a rebound in their business, despite the raised prices. In store traffic increased despite the higher prices of commodities displayed on store shelves.
Commerce Dept. Reported Increased Consumer Spending in the Certain Retail Sectors
According the Commerce Department’s June 2021 report, retail sales spiked by 0.6%, which was the opposite of the department’s May 2021 report. The previous month’s retail sales fell by 1.7%, slightly higher than the expected decline of 1.3%.
When compared to last year’s June report, last month’s retail sales surged by 18.0%, which has in fact surpassed the pre-pandemic level.
During the pandemic, consumer demands had shifted to electronic goods and motor vehicles, as millions of Americans had to work from home, while others wanted to avoid commuting by way of public transports.
The June 2021 increase in consumer retail spending indicated a renewed thrust toward paying for travel and entertainment related services. Economists attribute the trend to the fact that at least 160 million US citizens are now fully immunized against the COVID-19 coronavirus.
Aside from the huge spike in travel and hotel spending, other services that saw an increase in retail sales in the second quarter, include education, healthcare and restaurants as well as bars.
When compared to the June 2020 report in which restaurant and bar sales were limited to take outs and orders for delivery, the June 2021 sale of food and beverage products in restaurants and bars increased by 2.3%. Based on last month’s figures, sales in restaurants and bars in June 2021 grew by 0.6%.
As far as consumer goods are concerned, the clothes retail sector experienced a 2.6% increase in sales. Appliance and electronic outlets saw sales surged by 3.3%. About 1.2% of the June 2021 growth retail sales were accounted in online retail stores.