Spending at US retailers rose in June for the third month in a row, in a subdued show of resilience from American consumers.
Retail spending, which is adjusted for seasonality but not inflation, rose 0.2% in June, the Commerce Department reported Tuesday. That was a slower pace than last month’s revised 0.5% increase and below economists’ expectations of a 0.5% gain, according to Refinitiv.
Furniture sales jumped 1.4% in June from the prior month, while spending at department stores fell by 2.4% during the same period. Excluding sales at gasoline stations and on cars and parts, retail sales rose 0.3% in June from May. From a year earlier, overall retail sales rose 1.5% in June, the second-weakest pace since May 2020.
The figures add to signs that US consumers are still opening up their wallets amid higher interest rates, stubborn inflation and lingering economic uncertainty, though the report mostly showed that retail spending only inched forward. Whether or not that momentum persists beyond the summer remains to be seen.
“Consumers’ spending is suffering from the depletion of excess savings built up during Covid,” wrote Ian Shepherdson and Kieran Clancy of Pantheon Macroeconomics in an analyst note. “We estimate that the pace at which savings are being run down has slowed to $70B per month in May, from a peak of $90B last summer, and the resumption of student loan repayments from September will deal an additional blow.”
Retail sales feed into broader consumer spending figures that account for about two-thirds of economic output. Consumer spending likely held up in the second quarter, though at a slower pace than in the first three months of the year.
This story is developing and will be updated.
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