Washington, Aug 14: US retail sales posted an unexpectedly strong advance in July, as spending on a broad array of items shot up, the government said on Wednesday in a report that bolstered hopes of a faster economic recovery. Total retail purchases rose 1.4% last month to $317.2bn after an upwardly revised 0.9% gain a month earlier, the commerce department said.
Auto dealerships saw sales rise by a hefty 3.2% in July.
But even stripping motor vehicles out of the equation, retail sales increased a solid 0.8%. The dollar strengthened on the data, and the bond market, which had fallen earlier as it braced for a strong retail sales number, showed little reaction. Wall Street had expected sales to rise 0.9% overall and 0.5% excluding autos.
“This is yet another indication that we have an economy that’s gathering momentum,” said Rick Egelton, deputy chief economist at Bank of Montreal in Toronto. “Sales looked pretty good across the board”. The July increase in sales, the biggest since March, and upward revisions to both June and May lend credence to forecasts for a sharp pick-up in economic growth.
Retail sales for June had originally been reported as rising a milder 0.5% and the figure for May was revised to an increase of 0.5% from an unchanged reading. The strength in July sales was broad-based. Sales of building materials and garden supplies rose 1.3%, electronics sales increased 1.2%, general merchandise was up 1.1% and receipts at gasoline stations gained 1.6%, reflecting a rise in prices at the pump. Bureau Report