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Retail sales advance for fifth month, May numbers revised upwards
US RETAIL sales rose for a fifth month in June and figures from May were revised upwards amid gains at car dealers and non-store vendors, capping a quarter that probably saw consumer spending pick up after a tepid start to the year.
The value of overall sales advanced 0.5 per cent, matching economists' projections, after the prior month was revised up to a 1.3 per cent gain from 0.8 per cent, Commerce Department figures showed on Monday. Excluding purchases of cars and gasoline, sales climbed 0.3 per cent.
At the same time, a key subset of the data signalled less momentum: So-called retail-control group sales, which are used to calculate gross domestic product and exclude food services, car dealers, building materials stores and gasoline stations, were unchanged in June after an upwardly revised 0.8 per cent increase. The median estimate of economists was for a 0.4 per cent gain in June.
A tight labour market and lower taxes have supported solid gains in household purchases, the biggest part of the economy. That, along with steady business investment, are among reasons growth was projected to double in the second quarter from the first three months of the year, while the Federal Reserve continues its gradual pace of interest-rate increases. Economists expect the pace of gains in household purchases to settle back in the coming quarters.
"The consumer continues to forge ahead," said Ryan Sweet, head of monetary-policy research at Moody's Analytics Inc. "We expect a solid second half for consumer spending." The June control-group figures were "likely a blip" and third-quarter data may show some cooling, "but not enough to harm the broader economy," he said.
Americans are increasingly concerned about the effects of Trump administration tariffs, which risk backfiring on consumption and the economy, though the levies largely haven't yet been passed down to consumers.
Estimates in the Bloomberg survey for broad retail sales ranged from gains of 0.2 percent to 1 per cent.
Eight of 13 major retail categories showed increases, according to the Commerce Department data. The improvement in demand included a 0.9 per cent gain in cars and a 1.3 per cent rise at non-store retailers, the most since November. That category includes online sellers.
Health and personal care stores saw a 2.2 per cent increase, the biggest since 2004. Restaurant sales grew 1.5 per cent, and building material stores saw a 0.8 per cent gain.
The results were dragged down by declines including a 0.3 per cent drop at food and beverage stores, the most in a year; a 1.8 per cent slide at department stores, the biggest since 2016; and a 2.5 per cent decline at clothing retailers, the most since February 2017.
The retail sales data capture just under half of all household purchases and can be volatile from month to month. Fuel costs may have boosted the retail-sales results, which aren't adjusted for price changes. Filling-station receipts increased 1 per cent in June, as gasoline prices remain near the highest level since late 2014. BLOOMBERG