U.S. Retail Sales Advance for Fifth Month, May Revised Up
(Bloomberg) -- U.S. retail sales rose for a fifth month in June and figures from May were revised upward amid gains at auto dealers and nonstore vendors, capping a quarter that probably saw consumer spending pick up after a tepid start to the year.
The value of overall sales advanced 0.5 percent, matching economists’ projections, after the prior month was revised up to a 1.3 percent gain from 0.8 percent, Commerce Department figures showed Monday. Excluding purchases of autos and gasoline, sales climbed 0.3 percent.
At the same time, a key subset of the data signaled less momentum: 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, were unchanged in June after an upwardly revised 0.8 percent increase. The median estimate of economists was for a 0.4 percent gain in June.
A tight labor market and lower taxes have supported solid gains in household purchases, the biggest part of the economy. That, along with steady business investment, are among reasons growth was projected to double in the second quarter from the first three months of the year, while the Federal Reserve continues its gradual pace of interest-rate increases. Economists expect the pace of gains in household purchases to settle back in coming quarters.
“The consumer continues to forge ahead,” Ryan Sweet, head of monetary-policy research at Moody’s Analytics Inc., said by phone. “We expect a solid second half for consumer spending.” The June control-group figures were “likely a blip” and third-quarter data may show some cooling, “but not enough to harm the broader economy,” he said.
Estimates in the Bloomberg survey for broad retail sales ranged from gains of 0.2 percent to 1 percent.
Eight of 13 major retail categories showed increases, according to the Commerce Department data. The improvement in demand included a 0.9 percent gain in autos and a 1.3 percent rise at nonstore retailers, the most since November. That category includes online sellers.
Health and personal care stores saw a 2.2 percent increase, the biggest since 2004. Restaurant sales grew 1.5 percent, and building material stores saw a 0.8 percent gain.
The results were dragged down by declines including a 0.3 percent drop at food and beverage stores, the most in a year; a 1.8 percent slide at department stores, the biggest since 2016; and a 2.5 percent decline at clothing retailers, the most since February 2017.
The retail sales data capture just under half of all household purchases and can be volatile from month to month.
Fuel costs may have boosted the retail-sales results, which aren’t adjusted for price changes. Filling-station receipts increased 1 percent in June, as gasoline prices remain near the highest level since late 2014.
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