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Child Tax Credit Boosts July US Retail Sales, Mastercard Reports

U.S. retail sales in July increased by 10.9 percent year on year, excluding auto and gasoline, signifying “nearly quadruple the average growth in the month of July,” a new report from Mastercard showed.

According to the firm’s SpendingPulse report, the child tax credit strengthened department store and clothing sales.

“Back to school shopping is back,” Mastercard Chief Economist and Head of the Mastercard Economics Institute Bricklin Dwyer said in a statement. “Combined with greater savings and higher demand, the Child Tax Credit has provided a boost for families and is putting more money into retailers’ pockets.”

Department stores saw a 44.8 percent year-over-year increase, while apparel purchases skyrocketed to 80 percent year-over-year growth, the report showed. In addition, in-store sales accounted for 81.9 percent of total retail sales for July excluding auto, marking a more than 15 percent boost in brick-and-mortar shopping as compared to the same time last year.

“While eCommerce continues to play an increasingly significant role for retail, nothing replaces the in-store experience,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated, in a statement. “Consumers are shopping, spending and splurging across channels.”

The furniture and furnishing sector grew 3.2 percent year over year and a 26.8 percent compared to 2019, the report showed.

In June, retail sales increased 10.4 percent compared to 2020, according to a previous Mastercard report.

Read more: June US Retail Sales Jump 11 Pct YoY, Mastercard Reports

The return to in-store shopping is a positive sign of the economic recovery efforts in the wake of the pandemic. Last year, by comparison, $900 billion — or $1 of every $5 — was spent online.

eCommerce growth was steady in June at 8.3 percent year over year, showing a continuing, COVID-fueled shift to digital.

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