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Americans remained cautious in July, retail figures show
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NEW YORK (AP) — Worried about the stalling economic recovery, Americans remained reluctant to spend at stores in July, especially on pricier items such as jewelry, though they let go of some money for travel, according to data released Wednesday.
Revenue from high-end jewelry, which held steady in June, plummeted in July from a year earlier, when the figures already were dismal. Furniture also suffered as the boost from homebuyer tax credits wore off. Shoppers even pulled back on shoes and children’s clothing, while luxury spending — excluding baubles — was virtually unchanged.
The figures from MasterCard Advisors’ SpendingPulse, which include transactions in all forms including cash, signal that spending remains choppy as shoppers grapple with an almost 10 percent unemployment rate and tight credit.
Online revenue offered one bright spot, gaining for the 12th straight month. But travel spending — including airlines, trains, rental cars and hotels — also rose from July 2009, when it fell almost 2 percent.
The second-straight month with weak luxury sales contrasts with earlier in the year when the wealthy spent a bit more freely. The Standard & Poor’s 500 stock index has tumbled 9.5 percent since its high-water mark in late April, and home values fell 3.2 percent in the first quarter, according to the Standard & Poor’s/Case-Shiller 20-city home-price index.
The latest data from SpendingPulse follows government reports, released Tuesday, that also show consumers being picky about how they spend their money. The Commerce Department said personal spending was unchanged in June, the third straight lackluster month, and the personal savings rate rose to 6.4 percent of after-tax incomes in June.
“The tide (in spending) doesn’t seem to be rising overall,” said Michael McNamara, vice president of research and analysis for SpendingPulse. “There hasn’t been a consistent improvement that has been sustainable.”
Instead, shoppers seem to be shifting their spending more than usual each month, he said, including extra movement in July away from discretionary items.
“Recoveries tend to not happen in straight lines,” he said. “We are in a trough, but the question is, how long will the trough last?”
July marks the end of most retailers’ fiscal second quarter. But it’s the least important month in the quarter because stores use it to clear out summer leftovers and bring in fresh fall merchandise.
This year, stores discounted more than planned in July on summer items to pull in recession-scarred shoppers, whose confidence in the economy is falling.
Here are SpendingPulse’s figures comparing revenue for July 4 through July 31 with the similar period a year earlier, by product category.
• CLOTHING (at mall-based stores): Overall clothing sales slipped 1.1 percent from a year ago, when they dropped 5.2 percent. Children’s clothing fell 3.7 percent, the first decline in 10 months. Revenue in women’s clothing fell 1.9 percent, while men’s clothing sales dropped 16.3 percent.
• FOOTWEAR: Down 2.9 percent from a year ago, when revenue fell 7.4 percent.
• LUXURY: Excluding jewelry, revenue rose a meager 0.2 percent, compared with a year ago, when business was down 16.3 percent.
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