US consumers kept their spending in check during June as falling vehicle and gasoline sales kept total business fairly flat month over month.
Total sales at retailers and food service establishments fell by less than 0.1% in June from May, according to advance US Census Bureau estimates released July 16. Still, the result was better than the 0.3% decline forecast by economists, according to consensus estimates compiled by Econoday.
Meanwhile, four retailers entered bankruptcy proceedings during the month ended July 16. The median default risk for all retail categories fell slightly between June 17 and July 15.
Retail sales
Total US retail and food services sales hit $704.32 billion, down from a revised $704.48 billion in May but up from $702.68 billion in April, according to Census Bureau figures.
Shoppers cut spending at motor vehicle and parts dealers by nearly 2% over the prior month and also trimmed spending at gas stations by 3.0%. According to US Bureau of Labor Statistics data, the national average price of a gallon of regular gasoline fell by about 16 cents month over month in June.
Sales at nonstore retailers — a category that includes ecommerce and vending machines — grew by nearly 1.9% over the month, the highest increase in any retail category. The next highest growth was the 1.4% rise in monthly sales for building material and garden equipment and supplies dealers.
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Nonstore retailers also recorded the highest annual sales growth at nearly 9%.
Bankruptcies
The total of 21 retail bankruptcy filings in 2024 through July 16 is so far higher than in the same period of any year since 2020.
Outdoor clothing retailer Eastern Mountain Sports LLC and its affiliates filed for bankruptcy protection on June 18, seeking to reorganize. According to a filing, the company defaulted on a bank loan in March and as of June 18, owed more than $26.6 million to landlords, trade creditors and outstanding operating debts.
Default risk
The median default risk for publicly traded US retailers fell slightly in mid-July to 2.3%, from 2.4% on June 17, according to S&P Global Market Intelligence data. The scores represent the median odds of default on debt within a year and are based primarily on the volatility of share prices for public companies on major US exchanges, accounting for country- and industry-related risks and other macroeconomic factors.
Among the retail industries, the household appliance sector recorded the largest decrease in default risk, with its median one-year probability of default score dropping to 5.0% in mid-July from 7.8% on June 17.
The personal care product sector, meanwhile, saw the highest increase in the median probability of default, rising to 4.9% from 4.4%.