US retail sales in July saw a significant increase, indicating that American consumers are continuing to drive economic growth through their spending. According to the Commerce Department, retail sales, adjusted for seasonality but not inflation, rose by 0.7% in July compared to the previous month. This growth was higher than the upwardly revised 0.3% gain in June and exceeded economists’ expectations of a 0.4% rise.
The increase in spending was primarily driven by purchases of nondurable items such as clothing and sporting goods. However, sales of durable goods, which are products meant to last at least three years, declined during the same period. Furniture stores experienced a 1.8% drop in sales from June, while electronics and appliance stores saw a 1.3% decline.
It’s worth noting that the recent surge in gas prices, which reached their highest level in nearly 10 months, could have influenced the Commerce Department’s retail sales figures. When excluding spending at gasoline stations, retail sales still rose by 0.8% in July compared to the previous month.
These figures demonstrate the continued resilience of US consumers despite higher interest rates and persistent inflation. The upcoming second-quarter earnings reports from retail giants like Walmart, Target, and TJ Maxx parent company TJX will provide further insights into the state of the US consumer.
The US economy has shown remarkable strength this summer, defying expectations of a recession despite 11 interest rate hikes since the Federal Reserve began its fight against inflation in March 2022. Wall Street bankers and Fed economists have revised their estimates of a US recession due to the surprising resilience of the economy.
This story is still developing, and updates will be provided as new information becomes available.
Sources:
– CNN: [US retail sales rise at a faster pace in July, signaling continued consumer strength](https://www.cnn.com/2023/08/15/investing/premarket-stocks-trading-retail-sales-earnings/index.html)
– CNN: [Gas prices are rising around the country. Here’s why](https://www.cnn.com/2023/08/14/investing/gas-prices-going-up/index.html)
– CNN: [Wall Street and Fed economists reverse estimates of US recession](https://www.cnn.com/2023/08/13/economy/stocks-week-ahead-fed-divide/index.html)
Original Story at www.cnn.com – 2023-08-15 13:05:00
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