Here’s What Consumers Were and Weren’t Buying in June
Retail sales were disappointingly soft in June, continuing a zig-zag pattern of strength and weakness this year. Sales fell 0.3 percent, falling shy of economists’ expectations for a 0.3 percent gain after a 1 percent jump in May. The only spending categories to post decent gains were electronics and appliance stores sales, gas station sales and discount stores.
“In May, retail gains signaled that consumers may have started using their so-called pump price dividend toward purchases of discretionary items,” Chris G. Christopher, Jr., the director of consumer economics at IHS Global Insight, wrote in an email to clients. Now, he added, the retail data “are pointing to a consumer that spends their paycheck in fits and starts.”
Related: What the U.S. Must Do to Avoid Another Financial Crisis
Those fits and starts averaged out to a fairly healthy 2.6 percent annualized increase over April, May and June. “The glass half-full take on consumers is that 2.6 percent is still somewhat better than the 2.3 percent consumption growth we've averaged since the beginning of the current expansion,” J.P. Morgan economist Michael Feroli said in a research note. “The glass half-empty view is that there is now even less evidence of a sharp snapback in spending after an unambiguously disappointing Q1.”
Here’s a breakdown from the Bespoke Investment Group of how different retail categories fared:
Will Trump's Tax Cuts Really Happen? Economists Are Surprisingly Optimistic
Despite all the thorny questions swirling around President Trump's nascent tax reform plan, 29 of 38 economists surveyed by Bloomberg in a monthly poll said they expect Congress to cut taxes by November of next year.
The hitch: The economists don’t expect the cuts will help the economy much. The median projection of a larger group of 71 economists is for 2018 growth of 2.3 percent, up only slightly from 2.1 percent this year — and by 2019, the economists see growth slipping back to 2 percent.
