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.
U.S. retail sales rose in September as Americans bought more cars and gasoline, while a gauge of consumer spending pointed to stronger-than-expected economic growth in the third quarter.
Reuters reported that retail sales increased 1.1%, the Commerce Department said on Monday (Oct. 15), beating expectations after an upwardly revised 1.2% rise in August.
Retail sales outside of autos, gasoline and building materials — a barometer of consumer spending known as core retail sales — rose 0.9% last month.
That was well above the 0.3% gain expected by analysts in a Reuters poll, and suggests consumers did more to drive economic growth in the July-September period than economists had expected.
Consumer spending drives about two-thirds of the U.S. economy.
Sluggish demand and a punishing drought restricted the economy to a 1.3 percent annual growth pace in the April-June period. Before the retail sales report was released, economists were expecting growth to accelerate to a 1.6% pace in the third quarter, according to a Reuters poll.
The details of the report showed broad strength across retailers, with sales of motor vehicles and parts up 1.3%. Receipts at gasoline stations rose 2.5%, reflecting an increase in prices paid at the pump.
Other categories were also strong, with sales at electronics retailers up 4.5%, while sales at food and beverage stores rose 1.2%.
Retail sales fell for a second straight month in May and wholesale prices dropped by the most in three years, raising prospects of additional monetary policy easing from the Federal Reserve to spur economic growth.
According to Reuters, the reports on Wednesday (June 12) added to a raft of other data, including employment and manufacturing, pointing to a downshift in the economic recovery. Consumer spending had been one of the key pillars of support for the economy in the first quarter, and the sales data led a number of economists to cut forecasts for second-quarter growth.
Analysts said the darkening outlook opened the door a bit wider to the possibility of a third round of so-called quantitative easing at a Fed meeting next week.
“We still believe the Fed would prefer to wait a bit longer on QE3 to see how the domestic and global situations play out, but the weak data certainly strengthen the argument for action,” said Michelle Girard, senior economist at RBS in Stamford, Connecticut.
Retail sales slipped 0.2% as demand for building materials sagged and declining gasoline prices weighed on receipts at service stations, a Commerce Department report showed. April’s sales were revised to show a 0.2% drop instead of the previously reported 0.1% gain.
Motor vehicle sales rose 0.8%, a surprise given that manufacturers reported weak unit sales during the month. Excluding autos, sales fell 0.4%, the biggest decline in two years, after dropping 0.3% the prior month.
With spring having sprung and the economy continuing to show signs of a rebound, consumers opened up their wallets last month and caused retail sales to increase 1.6% last month, the Commerce Department reported today.
The March figures were 5% higher than those of March 2009 and sales from January through March were 5.5% higher than in the same period last year, Credit Union Times noted.
Total retail and food sales in March were $363.1 billion, compared with February’s $354 billion and $337.4 billion in March 2009.
The data from March showed 0.6% increase in non-automobile sales from February, but that was 6.4% higher than in March 2009.
There was a 6.7% increase in sales at car, truck, and recreational vehicle dealers and parts stores from February but that represented a 14.1% increase from March 2009.
Sales of other kinds of motorized vehicles rose 7.5% last month, a 16.1% increase from March 2009.
Almost all other types of retailers had increased sales in March. The largest growth was at building/garden supply and clothing stores, which saw sales rose by 3.1% and 2.3%, respectively.
Gasoline stations and electronics/appliance stores were the only kind of retailers that experienced declines in sales. They fell 0.4% and 1.3%, respectively.
As numbers continue to pour in from a time period that may prove to have been the bottom of the industry’s downturn, retail sales of travel trailers and fifth-wheels in 48 states fell 44.2% in February compared to the same month last year, according to Statistical Surveys Inc. (SSI).
Travel trailer registrations for the month were 5,306, down from 9,153, a drop of 42% compared to last year. Fifth-wheel sales decreased to 2,537 units from 4,915, a decline of 48.4%, Grand Rapids, Mich.-based SSI reports.
For the first two months of the year combined travel trailer and fifth-wheel registrations were off fully 45.2% from 24,722 in ’08 to 13,536 units this year.
Meanwhile, retail sales of folding camping trailers for the month dropped to 568 units from 1,066 a year ago, representing a decline of 46.7%. Year-to-date camping trailer sales were down from 1,629 in 2008 to 871 this year, a 46.5% dip.
Recreational park trailers sales in February fell 58% from 241 to 101 units with year-to-date totals down from 522 to 216, a 58.6% decline.
Sales figures from Kansas and California were not available.