Retail sales in US beat expectations with boost from autos
NAPLES, FLORIDA – NOVEMBER 26: Shoppers walk through an outdoor mall on Black Friday on November 26, 2021 in Naples, Florida. (Photo by SPENCER PLATT / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)
WASHINGTON, United States — US retail sales bounced back in June, exceeding analysts’ expectations Thursday on an uptick in auto sales, as consumer patterns fluctuated this year while households eyed President Donald Trump’s wide-ranging tariffs.
Overall sales climbed 0.6 percent last month to $720.1 billion, reversing the 0.9 percent decline in May, data from the Department of Commerce showed.
This was well above a 0.2 percent increase expected in a consensus forecast by Briefing.com, and total sales were up 3.9 percent from a year ago.
But there are signs that sweeping tariffs may be taking hold in the world’s biggest economy.
Motor vehicle and parts dealers saw sales advance 1.2 percent between May and June, the report on Thursday showed.
Overall sales were up by a slightly slower 0.5 percent excluding autos, and Pantheon Macroeconomics’ senior US economist Oliver Allen warned that “sales volumes were likely soft, given rising prices due to the tariffs.”
READ: GM leads first quarter US auto sales as tariffs loom
Home furnishing
Sales at furnishing and appliance stores declined slightly in the month, while spending also fell at department stores — all segments that are seen as more exposed to price increases due to tariffs.
“Spending on import-intensive goods seem to be struggling, with sales of furniture and home furnishings stores falling by 0.1 percent in June,” Allen said.
Given Pantheon’s expectations that more tariff-related cost increases will be passed on to consumers in the third quarter this year, this situation “seems to point, at best, to continued stagnation in real spending on goods this quarter,” he said.
In June, consumers continued spending at restaurants and bars, with sales at these places up 0.6 percent on a month-on-month basis.
Policymakers are closely monitoring the effects of Trump’s tariffs, which have so far had a limited impact on consumer inflation.
READ: Trump announces 30% tariffs vs EU, Mexico to begin Aug. 1
But central bank officials expect economic data over the summer months to provide more clues on the levies’ effects on prices, and their consequent impact on consumer behavior — a key driver of the US economy.
“Delayed tariff price increases and steady income growth continue to fuel spending despite weak survey data indicating building concerns by households,” said Nationwide senior economist Ben Ayers in a note.
“Weaker activity is still likely over the second half of the year as tariff uncertainty hangs over the outlook.”
