Sales at U.S. retailers rose more than forecast last month in a broad advance that shows consumers delivered for the economy in the second quarter.
The 0.6% increase in June retail receipts exceeded the highest estimate in a Bloomberg News survey and followed a 0.2% gain the previous month that was smaller than previously estimated, Commerce Department figures showed July 15. So-called core sales, used to calculate gross domestic product, rose a larger-than-projected 0.5% for a second month.
A prolonged period of job creation and slowly improving wage gains are providing households with the means to keep spending. Consumers are key to shaping the growth path for the world’s largest economy as global demand remains lackluster and threatens to damp business investment.
“This ends up capping a really great quarter for consumer spending,” said Omair Sharif, senior U.S. economist at Societe Generale in New York. “There’s a bit more confidence about job security, there’s a bit more confidence about where things are headed in terms of wages and the economy. All of that is combining to give us the rebound we’re seeing in retail sales.”
The median forecast in a Bloomberg survey called for a 0.1% advance in total sales, with estimates ranging from a decline of 0.5% to a 0.3% gain. May was previously reported as a 0.5% increase. April data were revised to a 1.2% increase from 1.3%.
Eleven of 13 major categories showed stronger demand in June from the prior month, including a 1.1% advance in receipts at online merchants and a 0.7% increase at health and personal care outlets.
Another report from the Labor Department on July 15, showed consumer prices climbed 0.2% for a second month in June, led by higher costs for energy and rents.
Sales of sporting goods, furniture and building materials also picked up. The 3.9% surge in building supplies followed a 2.5% plunge in May that was larger than previously estimated, which explained the bulk of the downward revision in total sales during the month.
Automobile dealers’ sales rose 0.1% in June after falling 0.5% the prior month. Industry figures earlier this month that showed U.S. vehicle sales slumped in June from the month before. Purchases of cars and light trucks fell to a 16.6 million annualized rate last month from a 17.4 million rate in May.
Receipts at gasoline stations increased 1.2% last month, the retail sales report showed. The Commerce Department’s data aren’t adjusted for prices, so fluctuating fuel costs can affect receipts at filling stations.
The figures used to calculate gross domestic product, which exclude categories such as food services, auto dealers, home-improvement stores and service stations, rose more than the 0.3% median projection. Readings for May and April were revised up.