Research Briefing: U.S. Census data provides silver lining that consumers are still spending

This week, the U.S. Census Bureau released its advanced estimates of U.S. retail and food services sales for August 2024. Although summer shopping did slow down, compared to July, retail sales were up 0.1% in August. Economists had forecast a 0.2% drop, so the sales lift has raised confidence in the health of the U.S. economy among some analysts.

Compared to the same time last year, monthly sales for August 2024 were up 2.1%. And total sales for June 2024 through August 2024 were up 2.3% compared to the same period last year.

Taking a detailed look at the business categories that experienced a sales lift in August 2024 compared to the month prior, shows that consumers are being selective about what they spend their money on. Rather than splurging on electronics, furniture, clothing or accessories, consumers are spending on smaller everyday items, like purchases made at florists, pet stores, home delivery businesses or party planning services. 

Consumers are also spending more on their personal, physical and mental well-being. Health and personal care stores and recreational hobby stores also saw an uptick in sales in August compared to the month prior. 

According to an August 2023 study by McKinsey, millennials and Gen Zers are spending more on health and wellness than older consumers. Gen Z’s recent August return to the classroom may have triggered more beauty sales and last minute back-to-school purchases. 

Additionally, the Summer Olympics closing ceremony took place on August 11, followed by the opening ceremonies of the Paralympics on August 28. With many viewers tuning in to watch these sporting events, and perhaps feeling inspired to take advantage of the last warm months of the year, sporting goods products may have been purchased more frequently than last year. 

Shoppers also appear to be bargain hunting rather than buying things at top dollar this summer. Used merchandise stores (included in nonstore retailers) have seen a rise in sales. Meanwhile, gas stations, department stores and electronics/appliance stores have seen a sales decline.