(Bloomberg) -- U.S. retail sales rose by more than forecast in July as Americans snapped up clothes and headed to restaurants, extending solid consumer-spending gains to the start of the third quarter.
The of overall sales advanced 0.5 percent from June, whose gain was revised down to 0.2 percent, Commerce Department figures showed Wednesday. The median forecast of economists surveyed by Bloomberg called for a 0.1 percent gain. Excluding purchases of autos and gasoline, sales climbed 0.6 percent, topping the median estimate for a 0.4 percent rise.
The data suggest consumer spending is continuing to drive the economy early in the quarter. Tax cuts have put more money in Americans’ pockets this year, consumer sentiment remains elevated and a gauge of small-business optimism rose in July to the second-highest level on record.
At the same time, wage gains have failed to accelerate much and have been eroded by inflation in recent months. Economists expect consumption, which accounts for about 70 percent of the economy, to settle back in the second half of the year after the fastest quarterly gain since 2014.
The report showed so-called retail control-group sales -- which are used to calculate gross domestic product and exclude food services, auto dealers, building-materials stores and gasoline stations -- rose 0.5 percent, slightly more than forecast, after a 0.1 percent drop in the prior month.
Estimates in the Bloomberg survey for broad retail sales ranged from a decline of 0.4 percent to a gain of 0.8 percent.
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