The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
US retail sales climbed in June by more than forecast in a broad advance, suggesting resilient consumer spending despite decades-high inflation and raising the prospects of an even larger Federal Reserve interest-rate hike this month.
The value of overall retail purchases increased 1 percent, after an upwardly revised 0.1 percent decline in May, Commerce Department figures showed Friday. The figures aren’t adjusted for inflation.
The median estimate in a Bloomberg survey of economists called for a 0.9 percent advance in overall retail sales from a month earlier.
While the figures aren’t adjusted for prices, the better-than-expected results indicate that consumer demand is holding up despite Federal Reserve policy aimed at tamping it down.
Fed officials are watching the retail sales data, along with other releases due Friday and next week, to determine whether to raise interest rates by 75 basis points at their meeting later this month, or consider a larger, 100 basis-point hike.
Two-year Treasury yields jumped following the report, while US stock futures fell and the dollar pared losses.
Nine of the 13 retail categories showed increases last month, according to the report, including furniture stores, e-commerce and sporting-goods stores.
Sales at gasoline stations rose by 3.6 percent, following a 5.6 percent advance in the prior month, and driven by a surge in gas prices to more than $5 a gallon in mid-June. Prices have since fallen sharply, suggesting the figures could soften in the July data.
Auto sales climbed 0.8 percent in June, following a decline in May.
Grocery store sales rose 0.6 percent, which likely reflects higher prices rather than increased buying activity since the figures aren’t adjusted for inflation. Food prices, along with gas and shelter, were among the leading contributors to the CPI in June.
Restaurant sales, the report’s only services component, advanced 1 percent.
So-called control group sales — which are used to calculate gross domestic product and exclude food services, auto dealers, building materials stores and gasoline stations — increased 0.8 percent in June, the largest gain since January.
By Olivia Rockeman
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