Retail sales in the United States had another solid month in June. The Commerce Department said on Monday retail sales increased 0.5 percent last month. And the data for May was revised to show an even higher rise (1.3 percent) the was previously reported (0.8 percent). May’s rise in retail sales was the largest since September of 2017.
If you exclude 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.
Consumer spending, which accounts for more than two-thirds of U.S. 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 increased expectations of a strong GDP reading in the second quarter. The government will publish its prediction 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 percent after advancing 0.8 percent in May. Receipts at service stations rose 1.0 percent on higher gasoline prices. Sales at building material stores increased 0.8 percent last month after surging 2.5 percent in May.
Receipts at clothing stores fell 2.5 percent, the biggest drop since February 2017. Online and mail-order retail sales surged 1.3 percent, the biggest gain since November 2017, after rising 0.4 percent in May. Receipts at furniture stores rebounded 0.6 percent.
Sales at restaurants and bars increased 1.5 percent. Spending at hobby, musical instrument and book stores declined further, falling 3.2 percent. That was the largest drop since December 2017.
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