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US retail sales increase solidly in June
[WASHINGTON] US retail sales rose solidly in June, boosted by increases in purchases of motor vehicles and a range of other goods, cementing expectations for robust economic growth in the second quarter.
The Commerce Department said on Monday retail sales increased 0.5 per cent last month. Data for May was revised higher to show sales rising 1.3 per cent instead of the previously reported 0.8 per cent gain. May's rise in retail sales was the largest since September 2017.
Economists polled by Reuters had forecast retail sales rising 0.5 per cent in June. Retail sales in June increased 6.6 per cent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after an upwardly revised 0.8 percent increase in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Core retail sales were previously reported to have risen 0.5 per cent in May.
Given the upward revision to May data, the unchanged reading in core retail sales last month likely does not change views that consumer spending accelerated in the second quarter. Consumer spending, which accounts for more than two-thirds of US economic activity, braked sharply in the January-March period, growing at its slowest pace in nearly five years.
In addition to the solid retail sales data, a sharp narrowing of the trade deficit in April and May has also bolstered expectations of a strong GDP reading in the second quarter. The government will publish its snapshot of second-quarter GDP later this month.
Consumer spending is being driven by a tightening labor market, which is steadily pushing up wages. Consumption is also being supported by tax cuts and savings.
In June, auto sales increased 0.9 per cent after advancing 0.8 per cent in May. Receipts at service stations rose 1.0 per cent on higher gasoline prices.
Sales at building material stores increased 0.8 per cent last month after surging 2.5 per cent in May.
Receipts at clothing stores fell 2.5 per cent, the biggest drop since February 2017. Online and mail-order retail sales surged 1.3 per cent, the biggest gain since November 2017, after rising 0.4 per cent in May. Receipts at furniture stores rebounded 0.6 per cent.
Sales at restaurants and bars increased 1.5 per cent. Spending at hobby, musical instrument and book stores declined further, falling 3.2 per cent. That was the largest drop since December 2017.