Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowU.S. retail sales rose by less than forecast, while an underlying measure of household spending pointed to a more resilient consumer at the end of the second quarter.
The value of retail purchases rose 0.2% in June after an upwardly revised 0.5% increase in May, Commerce Department data showed Tuesday. The figures aren’t adjusted for inflation.
So-called control group sales—which are used to calculate gross domestic product and exclude food services, auto dealers, building materials stores and gasoline stations—accelerated to a 0.6% advance, twice the prior month’s gain.
The government’s first estimate of second-quarter GDP will be released next week, and the latest retail sales data will help economists fine tune their forecasts.
Sales increased in seven out of 13 retail categories last month, including advances at non-store retailers, electronics stores and furniture outlets. The value of purchases at building materials stores, gas stations and grocery stores declined.
A strong labor market and easing inflationary pressures continue to underpin American consumers, but high borrowing costs and elevated prices are straining household budgets.
The figures largely reflect spending on goods, rather than services, limiting the takeaways of this particular report. While consumers are shifting more of their outlays away from merchandise toward services, the report suggested spending on some goods is holding up.
Dining out
Receipts at restaurants and bars—the only service-sector category in the report—edged up a modest 0.1% after surging 1.2% in the prior month. The state of the U.S. consumer will become clearer when inflation-adjusted figures on spending on merchandise and services are released later this month.
By and large, Americans’ finances remain in good shape by historical standards. But there are growing signs of strain.
Delinquency rates are rising, and nearly four in 10 households reported in June that it was somewhat or very difficult to pay for usual household expenses. This fall, student-loan borrowers will resume monthly payments, further limiting discretionary purchases for millions of people.
Please enable JavaScript to view this content.