Retail Sales Blow Away Expectations

Spending at retail stores rose at a much faster pace than expected in July, suggesting that the U.S. consumer is stronger than previously thought.

Retail spending jumped one percent in July, the Census Bureau said Thursday. Economists had been expecting a much smaller 0.3 percent increase.

Spending had declined 0.2 percent in June, largely due to a massive cyber-attack on U.S. car dealers and a decline in gasoline prices. Excluding sales at gas stations and car dealers, sales in June climbed 0.8 percent.

Last month saw a rebound in sales at car dealers. These jumped 3.8 percent, reversing the 3.4 percent decline in June.

But this rebound explains only part of the overall increase in sales. Even excluding autos, retail sales grew 0.4 percent and were up across a broad range of retailers.

Sales at general merchandise stores—which includes big chains like Walmart, Target, and Costco—rose by a strong 0.5 percent, an acceleration in growth from the prior month. Sales at the sub-category of department stores, however, fell.

Grocery store sales jumped one percent. Restaurant and bar sales rose 0.3 percent.

Sales at furniture stores rose 0.5 percent. Sales at electronics and appliance stores climbed by a very strong 1.6 percent. Health and beauty store sales climbed, as did sales at home and garden centers.

Online sales rose by 0.2 percent, a softer gain after the 2.2 percent surge in June related to Amazon’s Prime Day promotion.

Sales at the category covering sporting goods, hobby, musical instrument, and book stores dipped in the month. Clothing store sales also declined. A catchall category called miscellaneous stores—which includes florists, thrift shops, and pet and pet supply stores—also saw a fall in sales.

Gas station sales ticked up by 0.1 percent.