Retail sales rose in July for a fourth consecutive month, showing American households are regaining momentum as employment climbs.
Bloomberg reported that the 0.2% increase in purchases followed a 0.6% June gain that was larger than previously reported, Commerce Department figures showed today in Washington. The numbers in the report that feed into gross domestic product climbed by the most this year, prompting some economists to boost growth estimates.
More jobs and rising household wealth tied to higher home values and stock prices are boosting confidence and triggering improving sales at companies such as Michael Kors Holdings Ltd. A pickup in consumer spending, which accounts for about 70% of the economy, would help counter the fiscal headwinds of government cutbacks that have held back growth.
“We’re seeing sales pick up in multiple categories — that’s a promising sign that consumer spending might be a little bit stronger in the third quarter,” said Michael Brown, an economist with Wells Fargo Securities LLC in Charlotte, N.C. “We’ve seen wage and salary growth continue to expand with the pace of employment. That’s helped support some additional consumer activity.” Wells Fargo is the top forecaster of retail sales, according to data collected by Bloomberg.
The median forecast of 81 economists surveyed by Bloomberg called for a 0.3% advance in sales for last month. Estimates ranged from a drop of 0.1% to a 0.8% gain. The reading for June was revised up from an initially reported 0.4% increase.