Many people believe that Amazon is consuming a larger and larger share of retail sales, leaving small retailers vulnerable. (The President is among those people.)  Small retailers have long been an important part of the economy but are declining.  Yesterday’s retail sales report seemed to confirm that, because it showed that online sales increased 1% in June, 1.3% in July and up 10.3% year-over-year.  Online retailers like Amazon are doing very well.

But, the best segment was small retailers, whose sales rose 1.8% in July after declining 1.7% in June.  Of course, one month does not make a trend, but there are other reasons to be optimistic.  Furniture sales were up nicely in both June and July, as well as food & beverage sales, health & personal care, and hobby stores.  Healthy small retailers suggest Amazon may not be as anti-competitive as some fear.

But, what about large retailers, who also have been suffering the past year?  Today, Target released their Q2 report, which shows sales and profits were better than expected, both at the corporate level and the same-store level.  Hopefully, this will continue, especially among department stores.  Dick’s Sporting Goods says the retail market is still awful.

Increasing retail store sales is a prime indicator of the financial health and the confidence of the consumer, the biggest single component of GDP.  This improved retail outlook suggest that the currently estimated GDP growth rate of 2.8% is too low.  If it hits 3.0%, you can expect to hear champagne corks popping on Wall Street.

Don’t worry, Mr. Bezos, a healthier economy is good for Amazon too!