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16/07/24
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Retail Sales Report in US Highlights Economic, Consumer Resilience
In June, U.S. retail sales stayed the same as a decline in auto dealerships receipts was offset by general strength elsewhere, an indication of consumer resilience that boosted economic growth prospects for Q2.
Tuesday’s stronger-than-expected report by the Commerce Department also showed May sales were higher than estimated initially. It did, however, not change expectations that the Federal Reserve may begin cutting interest rates in Sept. amid inflation cooling and helped to alleviate fears of the economy slowing down sharply.
Comerica Bank’s chief economist, Bill Adams, said the economy was in good shape. Although there were indications of softness around the edges where consumers with moderate and low incomes were pulling back, openhanded spending by wealthy consumers was keeping the overall economy moving forward.
The Commerce Department’s Census Bureau said the unchanged reading in June retail sales came after an upwardly revised gain of 0.3% in May.
Economists had expected retail sales would drop by 0.3% after May’s previously reported gain of 0.1%.
In June, retail sales increased by 2.3% year-on-year. Momentum has slowed from the 7.7% gain recorded in January last year. After an extended period of high inflation, households have been trading down and looking for cheaper alternatives, as shown by earnings reports from major manufacturers and retailers.
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