Strong employment has sustained consumer spending levels, Commerce Department data for June released on Tuesday shows. Retail sales rose 0.3% to 0.4% in the month, after adjusting for inflation, driven by robust employment despite consumers’ depleted savings and high interest rates. As retailers look ahead to the remainder of 2024, they should anticipate steady yet moderated spending.
Lower-income households will continue to bear the brunt of lingering inflationary effects, and companies serving those households will see increased cost pressures. On a positive note, unemployment remains historically low at 4.1%, while real wages have risen considerably for the last two years as inflation decelerates. This economic backdrop is expected to support consumer resilience and spending capacity across the full range of income levels.
Source: Bureau of Labor Statistics
The takeaway:
Companies aiming for growth in 2024 will need robust strategies beyond relying solely on increased retail spending.
- Market expansion
- Introducing new product lines
- Enhancing customer convenience
