Sales at U.S. retailers were solid in July and stronger than previously estimated for May and June, suggesting the economy is on firm footing going into the second half of the year.
MarketWatch reported that the firm retail-sales data give more ammunition to those members of the Federal Reserve who want to raise interest rates. Retail sales account for about one-third of consumer spending, the main engine of U.S. economic activity.
Retail sales rose a seasonally adjusted 0.6% last month, or by 0.4% excluding the auto sector, the Commerce Department said Thursday. Economists polled by MarketWatch had forecast retail sales to rise by 0.7% overall and by 0.6% minus autos.
Adding to the sense of strength were upward revisions to May and June.
In June, sales were revised up to unchanged from a decline of 0.3%. May sales were revised to show a gain of 1.9% instead of a 1.0% gain.
“On balance, this morning’s report paints a brighter picture of consumer spending in the second quarter and suggest gains should continue through the third quarter,” said Jesse Hurwitz, economist at Barclays, in a note to clients.
Consumer spending has been volatile this year but the underlying trend is one of moderate growth, said Josh Shapiro, chief economist at MFR Inc.
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