Retail Sales Better Than Expected in June

Not all bad news on the retail front; people are spending, but for how long?

While wage and salary incomes took a big hit as jobs disappeared, those declines were more than offset by stimulus checks and unemployment benefits from the government. By some estimates, about two-thirds of people receiving unemployment benefits are now earning more than when they were employed. Personal income was up nearly 7% in May on a year-over-year basis, a higher pace than average income growth during the latest economic expansion.

Not all retail is created equal and spending was not dispersed evenly throughout the retail categories; Sporting goods, Hobby, Books and Music saw the greatest increase while not surprisingly Food Service and Clothing & Accessories were hit the hardest.

This continued spending will be will be short lived unless the federal government swoops in with more stimulus monies and extends the increase in unemployment.