August 22, 2022 — Retail Spending Holds Steady in July

AUGUST 22, 2022 – RETAIL SPENDING HOLDS STEADY IN JULY

US retail spending was up 0.7 percent in July, indicating the consumers still have the capacity to spend despite rising inflation. In June retail spending was up 0.8 percent. Falling gas prices have put more money into consumers’ hands during the last nine weeks. Shoppers have kept up spending despite experiencing the highest inflation in 40 years.

Companies are saying consumers are still spending, but they are mindful of rising prices.  This is translating into some companies cutting jobs to lower costs. The Fed is trying to balance the risk of raising rates enough to curb inflation but not that high that will result in economic weakness. The unemployment rate has remained low, but may rise if more companies start looking to cost cutting.

The Fed meets again on September 20-21 when they are expected to raise rates again by 0.5 to 0.75 percent. They have stated the need to slow the economy and holding rates up until it is clear inflation is decelerating.