Consumer Spending: Restaurant Revenues Down; Cars, Homes Up
Casual-dining restaurant sales declined 3.5% in July, after a 2% drop in June, according to the Knapp-Track Index, reports Bloomberg.
This marked the first two consecutive declines in the monthly index of restaurant sales after the industry was rocked by its worst streak in almost three years between December and February. Preliminary data suggest that August sales are still weak, although better than July.
Index creator Malcolm Knapp says that the recent restaurant weakness reflects "reallocation nation," in which people choose different discretionary items to purchase each month. “Consumers’ priorities change every month based on what they can afford,” and they've "begrudgingly" cut back on eating out to help subsidize other purchases, he said.
However, Americans' purchases of existing homes jumped 17.2% in July, to 5.39 million. And cars and light-duty trucks sold at a 15.7 million seasonally adjusted annualized rate, keeping the U.S. on track for its best year since 2007, when 16.1 million vehicles were sold.