July’s retail results echoed other recent signs of economic growth.
Advertisement
Economists at Morgan Stanley and Barclays Plc now see growth exceeding 3 percent at an annualized rate from April through June, compared with the Commerce Department’s advance estimate of 2.3 percent issued last month.
Although another report showed a rise in new applications for unemployment benefits last week, the trend pointed firmly to a tightening jobs market.
“Mark this retail sales report as an additional factor that may tilt the Federal Reserve toward a September hike”, Adolfo Laurenti, deputy chief economist at Mesirow Financial Holdings Inc.in Chicago, said in a research note.
Overall retail sales rose 0.6 percent in July from June to 446.5 billion, a slightly bigger increase than the 0.5 percent gain projected by analysts.
Piegza pointed out that on a quarter-to-quarter basis – which is how the nation’s gross domestic product is calculated – the modest improvement in second-quarter spending was a noticeable gain from the general malaise across the first three months of the year.
U.S. stocks were trading lower after the data, while the dollar rose against a basket of currencies.
Stocks on Wall Street were trading higher, while US Treasury debt prices fell.
The government will publish its second GDP growth estimate later this month.
“But we’re being deliberately cautious because consumers proved to be so reluctant to spend their gasoline savings earlier this year”, he added.
It’s estimated consumer spending accounts for around 70% of all U.S. economic activity, which naturally drives a lot of truck movements.
Retail sales rose 0.4% excluding autos.
Retail sales have been choppy in recent months, though they are generally inching upward, growing 2.4 per cent in the year through July.
Advertisement
Additionally, core sales in the two previous months were upwardly revised to show a 0.8 percent increase in May and a 0.2 percent uptick in June.
