Despite disappointing earnings in Q2 for department stores like Macy’s, retail sales are up and the economy looks healthy.

Overall US retail sales have risen 2.4% in the past year. July sales rose 0.6%, a percentage point above economists’ expectations. They grew 0.4% if you take out the auto and gas categories. And the numbers for May and June were revised up. Initial estimates for retail sales in June were a 0.1% drop month-over-month and a 0.2% drop year-over-year. Those numbers were revised to show a 0.4% increase and 0.2% increase, respectively. Similarly May sales were revised from a 1% gain to a 1.9% gain. It’s believed that factors like rising employment, stronger finances and cheap fuel costs have spurred consumer spending, with the auto industry and bars and restaurants profiting the most. And thanks to a strong report, the value of the dollar inched up from ¥124.45 to ¥124.6. Many economists believe this will lead to the first rate hike since 2006. However the Fed could hold off on the rate hike until next year in part because of disinflation as the Labor Department revealed import prices fell .9%, their biggest drop in six months.

The good news doesn’t extend to department stores. Macy's is the first major retailer to report for this quarter. Its sales dropped 2.6% YoY. Its comparable store sales dropped 2.1%; its comparable sales including licensed department stores dropped 1.5%. Shortly after releasing its quarterly earnings report, Macy's announced plans to sell a stake in its 378k SF DoBro location to Tishman Speyer for $270M. Macy’s will still own and operate a remodeled four-level store, while Tishman will redevelop the tower into a 10-story, Class-A office space.

Macy’s isn’t the only department store to see disappointing sales. Kohl’s saw same-store sales rise .1%, when analysts had forecast 1.7%. A factor that may explain lower department store sales is that the three-day tax holiday on back-to-school purchases was shifted from July to August in most states. However, investors are still betting on Nordstrom, since its YoY decline in Q1 was mainly because of money spent on expansions, acquisitions and technology.

Of course, we can’t talk about declining department store sales without discussing longtime rival “e-tail.” But department stores are still innovating to stay in the game. For instance, Macy’s has developed an app that alerts shoppers when they’re approaching a product they might like.

In line with lower department store sales are lower export volumes causing spending on shipment freights to fall 6.4% year over year in July, as shipping volume dropped 1.1%, the Wall Street Journal reports. US Bureau of Transportation statistics also revealed that truck, water, and rail intermodal shipments took its biggest dive since Q3 2012, declining .6%. That’s interesting because last year freight spending was experiencing its strongest growth since the recession. So why isn’t consumer spending growing at the same rate? One factor: a strong dollar, combined with weakened economies in Europe and Asia, means fewer tourists, less tourist shopping and fewer exports. That's not necessarily bad news. Analysts say it's normal for shipments and freight volumes to dip in July and rebound in August and September.

[WSJ, MktPl, TheSt, Reuters, MW, BI, Bloomberg, NYDN, Forbes]