US retail sales post solid rise in June

Retail and food services sales rose 0.6% to $457.0 billion in June from the same month in 2015, the Commerce Department reported Friday.

Retail sales in Singapore rose during the month of May, driven by growth in automobile sales, especially motor vehicles. The dollar rose versus a basket of currencies, while prices for USA government debt fell.

USA consumers opened their wallets wider in June, spending big at building and garden supply stores as the summer season kicked in, the Commerce Department reported Friday. They were previously reported to have risen 0.4 percent in May. June’s strong rise in core retail sales could prompt economists to raise their second-quarter GDP growth estimates.

Economists said the increase was a reassuring sign of consumer confidence after a lackluster start to the year.

Economists polled by Reuters had forecast overall retail sales edging up 0.1% and core sales gaining 0.3% last month. That lifted the year-on-year core CPI gain to 2.3 percent from 2.2 percent in May. Analysts expect a pick up from the 1.1 percent annual pace of the first quarter. This is beyond the Federal Reserve’s target of a 2% annual increase, a standard it set previously as a precondition for increasing interest rates. Auto sales edged up 0.1 percent after declining 0.5 percent in May. Two of the biggest auto makers had earlier reported that the US unit sales pace for cars and light trucks slipped in June from the prior month.

Capacity utilization for the industrial sector increased 0.5 of a percentage point in June to 75.4%, a rate that is 4.6 percentage points below its long-run 1972-2015 average. Also, retail sales rose 1.4 percent in May compared to that in April, on a seasonally adjusted basis. That’s the first time all year that each of the three categories saw an increase. “As we all know, in the USA the market is a little soft, but I think that we see some momentum in sales”, he told analysts Thursday.

Sales at restaurants and bars were down 0.3% from May and clothing-store sales fell 1.0% in June.

He also said while recent figures show a slight moderation in employment growth, it’s more a reflection of the economy nearing full employment rather than a slowdown in underlying activity.