Contrary to what you might hear on the street - or on the beach this summer - the U.S. consumer remains strong and ready to spend. July retail sales rose 0.5% from the previous month and are up 3.9% year-over-year. Even June’s numbers were revised higher, now showing a 0.9% monthly gain.
Any way you slice it, those are impressive figures - especially given the prevailing narrative that the economy is slowing and conditions are worsening.
Meanwhile, the stock market hit a new all-time high Friday morning, highlighting the disconnect between perception and reality. I’ve learned to tune out the constant negativity from the media and the casual conversations I have while traveling. Rarely does someone say, “Things are great, and I’m excited about the future.”
Instead, I look at the data. And one number from the latest retail sales report really stands out: spending at food and beverage stores continues to decline, while sales at bars and restaurants are near record highs. In fact, the share of total retail sales going to grocery stores is close to a multi-decade low - while dining out remains just shy of its all-time best level.
So, ask yourself: If the economy were truly as bad as many believe, would more people be eating out instead of saving money by cooking at home?
It’s Friday, which means many of you will soon be enjoying a cocktail after work or heading to the shore for the weekend. Just remember - every time you clink glasses, you’re helping keep this trend alive.
Here’s to the future,
Matt McCall
Editor, Market Insights
