NEW YORK –
Retail sales in the United States rose in June as inflation eased and the job market remained strong.
Retail sales rose 0.2% from May to June and 0.5% in the previous month, the Commerce Department reported Tuesday.
The figure represents the consumer inflation rate for June compared to the previous month, showing that consumers are keeping pace with inflationary pressures. While the 0.2% was slightly smaller than expected, economists on Tuesday focused on statistics that exclude more volatile items such as vehicles, gasoline, building materials and food services, which rose 0.6% in June. This 0.6% figure is used to calculate overall economic growth and showed a fairly solid performance in June.
Consumers spent at electronics stores and on furniture and home goods after declines in those areas. Online sales also increased significantly. But sales in supermarkets, gas stations and sporting goods stores fell. They hardly gained any weight in restaurants.
The increase in sales comes after a rebound in May that showed how resilient the economy remains despite price increases. Still, spending has been volatile this year, after rising nearly 3% in January. Sales fell in February and March before recovering in April and May.
“While they are still spending money, the June retail sales report suggests consumers are becoming pickier about their purchases,” wrote Oren Klachkin, an economist at Oxford Economics. He mentioned that the job market is losing some momentum, the decline in savings and rising interest rates have made using credit cards or taking out loans more expensive.
Based on financial reports from some of the country’s largest food producers, there are already early indications that consumers are curbing their spending somewhat.
Consumer spending, which accounts for 70% of total economic activity in the United States, has been the driving force behind the economic recovery from the pandemic-induced decline. Government financial aid, suspension of student loan payments and low interest rates contributed to this.