JWN Nordstrom Inc

By Steven Russolillo 

American consumers appear to be feeling pretty good about themselves. If only the average retailer could say the same thing.

U.S. consumer spending recently rose at its fastest pace in nearly seven years. The uptick makes sense. The labor market is still adding jobs, wage and salary income are on the rise, and sentiment is fairly upbeat.

All of that should bode well for Tuesday's retail-sales report, one of the last major data points prior to this week's Federal Reserve policy meeting.

While the headline figures aren't expected to be as good as last month's report, the data should show healthy consumer spending and the growing bifurcation between struggling brick-and-mortar retailers and thriving internet outlets.

Economists polled by The Wall Street Journal expect retail sales to have risen by 0.3% in May from a month earlier. While that would be down from 1.3% growth in April, it would exceed the 0.2% average growth over the past 12 months.

One reason behind the optimism is a recent drop in the saving rate. That suggests Americans might be willing to spend a little more of their take-home pay. The personal-saving rate -- money not spent as a share of after-tax income -- fell to 5.4% in April, the lowest in 2016 and down from 5.9% in March.

Polling firm Gallup also showed overall spending remained strong in May. It surveys adults daily on how much they spent the day before, excluding bills or major purchases. Americans' daily self-reports of spending averaged $93 in May, similar to the average $95 spent in April and indicative of healthy spending levels, according to Gallup.

What's more, Tuesday's data should show the glaring divide between retail's winners and losers. For instance, internet and catalog sales in the 12 months through April grew more than three times as fast as overall sales, up 10.2%. That is in large part thanks to Amazon.com Inc.'s success.

Meanwhile, department-store sales fell 1.7% in the same period. Struggling retailers Macy's Inc., Kohl's Corp. and Nordstrom Inc. are among a number of victims of sagging mall traffic.

The upshot: Consumers' increasingly loose purse strings aren't showering gold everywhere.

Write to Steven Russolillo at steven.russolillo@wsj.com

(END) Dow Jones Newswires

June 14, 2016 02:47 ET (06:47 GMT)

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