US retail sales unchanged in June; prior month revised higher
Retail sales unchanged in June
May retail sales gain revised up to 0.3% from 0.1%
Core retail sales surge 0.9%; May data unrevised
By Lucia Mutikani
WASHINGTON, July 16 (Reuters) -U.S. retail sales were unchanged in June as a drop in receipts at auto dealerships was offset by strength elsewhere, a show of consumer resilience that boosts economic growth prospects for the second quarter.
The report from the Commerce Department on Tuesday, which showed sales for May were higher than initially estimated, did not change expectations that the Federal Reserve could start cutting interest rates in September amid cooling inflation. It also helped to assuage fears of a sharp slowdown in the economy.
"The economy is in pretty good shape, there are signs of softness around the edges where low and moderate income consumers are pulling back ... but openhanded spending by affluent consumers is keeping the economy as a whole moving forward," said Bill Adams, chief economist at Comerica Bank.
The unchanged reading in retail sales last month followed an upwardly revised 0.3% gain in May, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would fall 0.3% after a previously reported 0.1% gain in May. Retail sales increased 2.3% on a year-on-year basis in June.
Momentum has, however, slowed from the 7.7% gain logged in January 2023. After a period of high inflation, households are trading down and seeking cheaper alternatives, as evident in earnings reports from major retailers and manufacturers.
PepsiCo PEP.O CEO Ramon Laguarta said last week that lower-income consumers were "stretched" and "strategizing a lot to make their budgets get to the end of the month."
Online store sales jumped 1.9% last month, adding to a 1.1% increase in May. Sales at gasoline stations dropped 3.0%, reflecting lower prices at the pump. Cheaper gasoline is likely freeing money for other spending.
Building material and garden equipment store sales increased 1.4%. Sales at food services and drinking places, the only services component in the report, gained 0.3% after rising 0.4% in May. Economists view dining out as a key indicator of household finances.
Furniture store sales rose 0.6%. Receipts at electronics and appliance outlets rose 0.4%, while those at clothing retailers increased 0.6%. Sales at sporting goods, hobby, musical instrument and book stores dipped 0.1%.
Receipts at motor vehicles and parts dealers declined 2.0%. A cyberattack at software systems provider CDK hit operations at several auto dealerships during the second half of June.
'RESILIENT PACE'
Retail sales excluding automobiles, gasoline, building materials and food services surged 0.9% last month after rising by an unrevised 0.4% in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Economists now estimate that consumer spending, which accounts for more than two-thirds of the economy, grew at a 2.0% annualized rate in the second quarter. They had previously forecast consumer spending would match the first quarter's 1.5% rate. Growth estimates for the April-June period are around a 2% rate. The economy grew at a 1.4% rate in the first quarter.
"The all-important U.S. consumer, while increasingly discerning regarding purchases, continues to spend at a resilient pace," said Quincy Krosby, chief global strategist at LPL Financial. "This report doesn't negate expectations that the Fed will cut rates at its September 18 meeting, unless of course inflation-related data releases indicate an uptick in prices."
Nonetheless, the outlook for consumer spending is less favorable. Most households have run down the excess savings accumulated during the COVID-19 pandemic and are carrying a lot of credit card debt, which is becoming more expensive as interest rates remain elevated.
Wage growth is also moderating as the labor market eases. The pace of consumer spending, however, remains sufficient to keep the economic expansion on track.
Interactive graphic-Monthly change in US retail sales https://reut.rs/3Lv6owc
Graphic-Monthly change in US retail sales https://reut.rs/4bMoZyA
Interactive graphic-Monthly change in US core retail sales https://reut.rs/4bMoZi4
Graphic-Monthly change in US core retail sales https://reut.rs/4bPt9ps
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
