US retail sales rise in July, aided by autos and restaurants

“The consumer is in good shape”, Brian Jones, a senior U.S. economist at Societe Generale in New York, said before the report.

Retail sales excluding automobiles, gasoline, building materials and food services rose 0.3 percent after a revised 0.2 percent gain in June. Needless to say, even that modest rate of consumer spending suggests that the public remains somewhat cautious in their willingness to open their pocketbooks.

The other line to watch is retail sales ex-autos, gas, and building supplies, which is expected up 0.5%. “We have a vibrant labor market and the unemployment rate continues to move lower”.

Retail sales increased 0.6 percent last month.

The June uptick matches economists’ forecast of an 0.6% rise in retail sales, according to a survey by FactSet. The revised reading for June also reversed a previously estimated 0.1 percent drop, painting a healthier picture for consumer spending. The prior month’s softness had been unexpected, making the rebound in July more welcome. Economists had forecast core retail sales rising 0.5 percent in July. In contrast, electronics and appliance stores (down 1.2 percent) and general merchandise stores (down 0.5 percent) experienced weakened sales in June.

Retail sales rose 0.4% excluding autos. The year-over-year pace improved from a disappointing 1.3 percent pace in April to 2.4 percent in July. Most of the growth in retail spending has occurred at auto dealers, furniture stores and restaurants, barely offsetting the downward pressure on spending caused by lower fuel costs. Sales rose 1.5 percent, the biggest gain since February.