Consumer spending on clothing and footwear rose 0.6 per cent in the US in July. Clothing and accessories store sales were up 0.8 per cent on a month-over-month basis.

July’s strong results are consistent with a confident consumer. Households are in good shape with spending and that should continue as long as the labor market remains healthy. However, the impact of volatile financial markets and increased trade tensions in recent weeks may put a wind of caution in consumer spending in 2019.

Within goods, recreational goods and vehicles were the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas. Disposable personal income , a key indicator for consumer spending, increased 0.3 per cent in the month. Real disposable personal income was up only 0.1 per cent in July, as inflation creeps back into the economy. The core consumer price inflation is expected to rise to 2.1 per cent by 2021. The rise in personal income reflects increases in compensation of employees and social benefits that were partially offset by a decrease in personal interest income. The personal saving rate–personal saving as a percentage of disposable personal income--was 7.7 per cent in July.