America’s economic recovery remains consumer led. With government outlays expanding very slowing, business investment remaining soft, and erratic export growth, consumers have represented the only significant prime mover.
That helps explain why retail sales and other data related to consumer outlays are attracting more attention than usual. According to data recently released by the Commerce Department, U.S. retail sales hardly budged in July.
Americans are spending on certain items, but are generally spending less on apparel and electronics, which show up in retail spending statistics, and more on entertainment, travel, and healthcare, which do not.
As reported by the Wall Street Journal, demand for clothing and household in recent years has been noticeably softer than during past economic recoveries. What demand there has been has been shifting online and away from traditional retailers like Macy’s, Kohl’s and Nordstrom, which all recently reported lower quarterly sales.
Retail today represents a smaller slice of household spending with consumption of services now representing about two thirds of all personal expenditures.
