Industries

Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Consumers spend inside during heatwaves

Retail sales tied to home buying, like furniture and electronics, lost ground.

August 15, 2023

July retail sales rose 0.7%, scoring the largest increase since earlier this year when a record bump in Social Security payments buoyed spending in January. July’s outcome beat market expectations for a 0.4% rise, while June retail sales were revised a touch higher to +0.3%.

Online sales posted the largest monthly increase in 2023, rising 1.9% in July. Those sales were boosted by promotions from large online retailers. E-commerce sales benefitted from soaring temperatures, which kept shoppers in their cooler indoor environments. The average temperature during July was 76.4°F, 2.8°F above the 20th century average; it was the third warmest in the 128-year record reported the National Oceanic and Atmospheric Administration.  Even traditional department stores, which had lost ground in recent months to big-box discounters, fared well, up 0.9% due to promotions to compete against online channels.

Back-to-school sales started earlier than usual with some kids returning in early August. Clothing and sporting goods sales rose 1% and 1.5%, respectively. 

Sales at restaurants and bars increased 1.4% as consumers moved indoors. Anecdotal reports suggest that concert goers juiced local economies. Taylor Swift and Beyoncé are forces of nature. This is the same time that billion-dollar summer blockbusters filled movie theaters and the restaurants and bars surrounding them.

Core retail sales, used in the calculation for GDP, rose by a solid 1% in July, which was twice what was expected. The surge in individual wages above inflation more than offset the crimp of tightening lending standards and consumer delinquencies. The third quarter is off to a sizzling start from a consumer spending perspective.

Still, sales were not all rosy in July. Big-ticket items, which often require financing, declined. Sales of furniture and electronics dropped 1.8% and 1.3%, respectively.

Housing affordability is a huge issue with the 30-year fixed mortgage rate at 7.50%, the highest in 23 years. Home equity loans have also tightened. Those shifts will suppress spending on items related to home sales, including vehicles. Sales of light vehicles (mostly trucks) and parts fell 0.3%, which was consistent with the flat reading in unit sales during the month. 

Consumers entered the summer with a tailwind, with the first full quarter of wages outpacing inflation.

Bottom Line

Consumers entered the summer with a tailwind, with the first full quarter of wages outpacing inflation since the onset of the pandemic. Gains are expected to slow but remain solid until tighter credit conditions and student loan payments resume in the fall. Federal Reserve Chairman Jay Powell is expected to keep his options open for another rate hike when he speaks at Jackson Hole next week. However, we believe that the Fed will hold rates in its current 5.25%-5.5% range through year-end. 

Explore more

Meet our team

Image of Kenneth Kim
Kenneth Kim
Senior Economist, KPMG US

Subscribe to insights from KPMG Economics

KPMG Economics distributes a wide selection of insight and analysis to help businesses make informed decisions.

Thank you

Thank you for subscribing. You should receive a confirmation e-mail soon.

Subscribe to insights from KPMG Economics

Now more than ever, companies are using data to make informed decisions about the future of their business. KPMG Economics is continuously monitoring and analyzing economic and geopolitical data so we can provide business leaders with reliable and timely insight and analysis.

To receive our Economic Updates and other relevant content published by the KPMG Economics as soon as it is released, please provide the following details:

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline