United States: Retail sales jump up in June
July 15, 2016
Nominal retail sales increased 0.6% in June over the previous month. The result overshot both the downwardly-revised 0.2% expansion in May (previously reported: +0.5% month-on-month) and a paltry 0.1% rise the markets had expected. Retail sales are a good indicator of the evolution of consumer spending, which accounts for over two-thirds of overall U.S. GDP. June’s figure, along with the results in April and May, suggest that growth in private consumption was rock-solid in Q2.
The report from the Department of Commerce shows that June’s increase reflected higher sales of motor vehicles and parts, food and sales in gasoline stations. In addition, sales of furniture, building materials and garden equipment bounced back from a contraction in May to an expansion in June. Meanwhile, the closely-watched core retail sales index (or control group) that excludes cars and car parts also showed a healthy increase in June. Core retail sales increased 0.7% over the previous month, which came in above the 0.3% rise tallied in May.
Compared to same month last year, retail sales increased 2.7% in June, which was faster than the revised 2.2% expansion tallied in May (previously reported: +2.5% year-on-year). A notable highlight from this month’s retail sales report was that sales at department stores declined 3.7% year-on-year in June, but sales at so-called non-store retailers—a proxy for e-commerce sales—jumped 14.2% annually. This suggests that American consumers are increasingly opting to make purchases online.
Author: Ricardo Aceves, Senior Economist