July Retail Sales Mixed

August 5, 2010 Updated: October 1, 2015

Leizl Tiangco takes a break from her work as a medical billing agent in a physical therapist's office in Glendale, Calif., to shop online, in this file photo. Internet spending showed signs of strength, increasing 10.9 percent on a year-over-year basis.  (Robyn Beck/AFP/Getty Images)
Leizl Tiangco takes a break from her work as a medical billing agent in a physical therapist's office in Glendale, Calif., to shop online, in this file photo. Internet spending showed signs of strength, increasing 10.9 percent on a year-over-year basis. (Robyn Beck/AFP/Getty Images)
Retail sales figures for July suggest U.S. spending is still conservative. In particular, expensive jewelry purchases dropped last month, but travel may have picked up according to data released on Aug. 4.

According to research released from MasterCard Advisors’ SpendingPulse, which measures transactions of different types including cash, indicate that spending overall is erratic given the context of consumers facing around a 10 percent unemployment rate and limited spending capacity.

Internet spending showed signs of strength and has followed a positive trend for last 12 months. The sector, which has posted gains throughout 2010, regained double digit growth in July, increasing 10.9 percent on a year-over-year basis, in contrast to June, when for the first time since November 2009 it had dipped into single digits. In terms of eCommerce subcategories, apparel increased in double digits for the eighth consecutive month, up 13.7 percent in July on a year-over-year basis, but smaller than the growth rate of 18.6 percent posted in June. Almost all of the eCommerce subcategories posted year-over-year growth, with the exception being department stores, which was down by 1.9 percent following seven months of double-digit growth. Family apparel was up a very robust 22.2 percent year over year.

Also, the travel category has experienced growth, with airlines, trains, rental cars, and hotels having increased from July 2009 when it dipped slightly to 2 percent.

Other items that appeared to drop in demand were furniture, likely attributable to the end of the homebuyer tax incentives. Consumers also bought fewer shoes and children’s clothing.

The more affluent shoppers seemed to have pulled back compared to spending patterns earlier in the year.

"The tide (in spending) doesn't seem to be rising overall," said Michael McNamara, vice president, Research and Analysis for SpendingPulse. "There hasn't been a consistent improvement that has been sustainable."

The service industry is also following a similar trend, with “the restaurant business, where we have seen consumers shift from full-service restaurants, and particularly fine dining, to limited-service, and quick-service outlets.”

Rather shoppers seem to be altering their spending more than usual each month, he said, including extra movement in July away from discretionary items.

"Recoveries tend to not happen in straight lines," he said. "We are in a trough, but the question is, how long will the trough last?

Stores discounted more than expected this year in July on summer items to counteract the shadow of recession on shoppers, whose confidence in the economy is falling.

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