It turns out Americans’ desire to get out of the house and spend their money over the last few months was more than just a temporary “high” from government stimulus payments. Consumers continued the trend in June—dining, driving, and buying clothes months after the stimulus ended.
The U.S. Census Bureau reported Friday that retail sales rose 0.6% from the month before, surprising economists, some of whom had expected a slight downturn. Sales in bars and restaurants gained 2.3% as people continued socializing offline and shoppers spent more on clothing, gas, and electronics. Spending in several categories fell, including motor vehicles and parts, down 2% as manufacturers grappled with an ongoing shortage of computer chips. Consumers also cooled on furniture and building materials and garden supplies.
Despite the shifting preferences, people are still finding the will to buy even though it’s been months since the government gave them additional spending money, said BMO senior economist Sal Guatieri in a commentary.
“American shoppers have renewed spending at a solid rate even as the sugar high from rebate payments wears off,” he wrote. ”They are buying more services than goods, but there's plenty of pent-up demand here, especially for travel and in-person entertainment.”
The uptick in spending at a solid rate even as the sugar high from rebate payments wears off,” he wrote. ”They are buying more services than goods, but there's plenty of pent-up demand here, especially for travel and in-person entertainment.”
The uptick in spending on gas, clothing, and restaurant meals and the decline in sales of household goods like furniture shows that Americans are shifting their focus after a year and a half of pandemic life. Indeed, they seem to be making up for lost dining-out time, spending more at bars and restaurants than in pre-pandemic days for the fourth straight month.
Higher prices in many different categories have also contributed to the increase in the dollar value of goods sold, economists said, as consumers got over sticker shock and continued to buy some of the things they needed and wanted.