A new report reveals that retail sales dropped last month as consumers anxiously contemplate the economic impact of tariffs. The survey, carried out by the National Retail Federation, indicates that core retail spending, excluding expenditures on restaurant, car, and gasoline, slipped by 0.3% from May to June, though it increased by 3.4% compared to last year. This represents the first monthly decrease since February, as per the trade association's data.
According to NRF President Matthew Shay, American consumers may be adapting a "wait-and-see approach" due to uncertainties surrounding tariffs and trade policy effects on the economy. Further understanding on the issue is expected with the forthcoming official June retail figures release. While economic fundamentals remain stable and consumer purchasing power is largely unaffected, the slowing economy is gradually impacting consumer sentiment, Shay expounds.
The survey also indicates that spending decreased from May to June in every retail category except one – digital books, games, and other products. Notably, Oppenheimer has been tracking a selection of items potentially targeted for tariffs since April, reporting "limited" transitional shifts in discretionary retail goods pricing. In a recent research note, the firm cited minimal price increases among the 13 out of 19 companies it monitors, with many prices remaining stagnant or even decreasing.
However, Oppenheimer warns that companies perceive price increases as a crucial strategy for mitigating the potential impact of tariffs and anticipates that pricing changes will be imminent.