Retail Sales Growth Eases In June, But Spending Healthy Into Summer
A key reading of consumer spending, which feeds into GDP calculations, came in more than double Street forecasts last month.
U.S. retail sales edged only modestly higher in June, Commerce Department indicated Tuesday, but a measure that strips out volatile components topped Street forecasts, suggesting consumer spending remains healthy heading into the summer months.
June retail sales rose 0.2% to a collective $689.5 billion, the Commerce Department said, missing the Street consensus forecast of a 0.5% gain. The figure is not adjusted for inflation, and includes overall sales of gasoline and other goods that have been volatile in recent months.
The May total was revised to a gain of 0.5% from the original estimate of a 0.3% month-on-month advance, the report indicated.
Stripping out the auto sector, June retail sales were up 0.2%, the Commerce Department report noted, while stand-alone sales of gasoline fell 1.4% as prices rose to around $3.684 per gallon on average over month, according to data from the U.S. Energy Information Administration, compared to an average of $3.666 per gallon in May.
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The closely-tracked control group number, which excludes autos, building materials, office suppliers, gas station sales and tobacco and feeds into the government's GDP calculations, rose 0.6%, more than double analyst's estimates of a 0.2% gain.
US June Retail Sales: Score another win for team soft landing. The control group which feeds into the estimate of GDP was up 0.6% & 2.1% on a 3mo avg annualized basis. That’s consistent with our Q2’23 GDP forecast of 1.7% & implies modest upside risk.— Joseph Brusuelas (@joebrusuelas) July 18, 2023
Inflationary pressures have eased notably over the past six months, as well, with the Bureau of Labor Statistics' headline June reading slowing to an annualized rate of 3%, the lowest in two years.
U.S. stocks edged lower following the data release, with futures tied to the Dow Jones Industrial Average down 20 points and those linked to the S&P 500 indicating a 6 point move to the downside.
Benchmark 10-year Treasury note yields slipped 2 basis points to 3.746% following the data release while the dollar index was marked 0.1% lower on the session at 99.741 against a basket of six global currencies. Benchmark 2-year note yields fell 3 basis points to 4.677%.
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