Retail sales better than expected in June

EleonJuly 16, 2024

8 1 minute read

Retail sales better than expected in June

Retail sales remained flat in June, defying Wall Street forecasts for a decline amid signs of a slowdown in the U.S. economy.

Economists had expected spending to decline 0.3%, according to Bloomberg data. Meanwhile, retail sales in May were revised upward, rising 0.3%, compared with a previous reading of 0.1%, according to Census Bureau data.

June sales, excluding autos and gasoline, rose 0.8%, above consensus estimates for a 0.2% gain. The control group in Tuesday’s release, which excludes several volatile categories and factors in the gross domestic product reading for the quarter, rose 0.9% in June, above estimates for a 0.2% gain.

“While retail sales were flat in June, the strong 0.9% month-over-month increase in control group sales should ease concerns about consumer distress in the wake of the renewed decline in confidence,” Paul Ashworth, Capital Economics’ chief North America economist, wrote in a note to clients. “To be sure, second-quarter consumption and GDP growth still do not appear to have exceeded 2% annualized, but June’s strong gain suggests a stronger third-quarter performance.”

Non-store retail sales were the highest by category, up 1.9%. The largest decline was at gasoline stations, where sales fell 3%. Motor vehicle and parts dealers also saw a 2% decline.

US consumer spending figures are down but growth remains strong. These data, combined with better-than-expected inflation figures, have led markets to expect the Fed to make its first interest rate cut by the end of its September meeting.

In an interview with the Economic Club of Washington on Monday, Federal Reserve Chairman Jerome Powell declined to say when the Fed might begin its easing cycle.

“I’m not going to give specific signals about any particular meeting,” he said. “We’re going to make those decisions meeting by meeting, based on how the data evolves and the balance of risks.”