Surprise Boost in Retail Sales Last Month Exceeds Forecasts
The latest retail sales figures, released by the Commerce Department on Thursday, indicate a resilient consumer market in the United States despite the ongoing impact of President Donald Trump’s tariffs. Retail sales increased by 0.6% in June compared to May, following a 0.9% decline in the previous month. This growth surpassed the anticipated 0.2% gain as projected by economists in a FactSet poll.
Notably, spending across various categories saw an uptick last month, with car dealerships experiencing one of the most significant monthly increases, up 1.2%. However, it’s essential to note that these figures have not been adjusted for inflation, and some goods have already seen price hikes due to tariffs. After accounting for a 0.3% increase in consumer prices in June, retail sales growth reduced to a more modest 0.3%.
Despite this, there are indications that Americans may not be significantly reducing their spending. Sales at restaurants and bars, often considered a barometer of discretionary income, rose by 0.6% in June. This suggests that even when consumers tighten their belts, expenditure on dining and alcoholic beverages is among the last to be cut back.
US stock futures exhibited muted responses this morning, with Dow futures falling 67 points (0.15%), S&P 500 futures remaining flat, and Nasdaq 100 futures gaining 0.14%.
As the tariffs begin to influence prices, investors and economic policymakers are closely monitoring consumer spending patterns. Consumer spending represents approximately two-thirds of the US economy, making it a critical factor in the overall economic health. This story is ongoing and will be updated accordingly.
