Consumer spending rose for the third straight month in June, highlighting the persistent strength of U.S. households that has complicated the Federal Reserve’s efforts to tame inflation.
Retail sales rose 0.2 percent in June compared with May, a slowdown from the 0.3 percent rise in the prior month. Compared with a year ago, retail sales are up 1.2 percent.
The figures are adjusted for seasonality but not for price changes. In June, the consumer price index rose 0.2 percent after increasing 0.1 percent in May. Over the last 12 months, the index increased 3.0 percent.
The report from the Commerce Department on Tuesday painted a mixed picture of consumer demand. The headline figure was dragged down by a 1.4 percent decline in gas station sales. Excluding gas stations, retail sales rose 0.3 percent. Compared with a year ago, when fuel prices were very high, sales at gas stations are down 22.7 percent.
Auto sales rose 0.3 percent, a slowdown from the 1.3 percent gain in the prior month and lower than many analysts expected. Compared with a year ago, they are up 5.3 percent.
Excluding motor vehicles and gas stations, sales were up 0.3 percent for the month and 3.9 percent over the past 12 months.
Sales in electronics and appliance stores, a category that had been weak until recently, rose 1.1 percent after rising 2.1 percent in May and 0.5 percent in April. From a year ago, however, sales are up just 0.9 percent.
Sales at furniture stores, another category that had been weak until recently, jumped 1.4 percent. Prices for furniture were up just 0.1 percent, suggesting a real surge in buying.
Online sales rose 1.9 percent and are up 9.4 percent for the year, the strongest year-over-year rise in any of the Commerce Department’s silos of retail.
Bars and restaurants saw a small 0.1 percent increase after a 1.2 percent rise in May. Compared with a year ago, sales are up 8.4 percent. Prices of dining out were rise 0.4 percent for the month and are up 4.7 percent for the year, indicating that households pulled back their meals away from home in the month (although they are still spending more in real terms than they were a year ago.)
There were declines in sales at general merchandise and department stores, health and beauty stores, and home and garden stores. Sporting goods and book store sales fell.
Clothing store sales rose 0.6 percent for the month and are up 0.7 percent from a year ago. Clothing prices were up 0.3 percent for the month and 3.1 percent for the year.
Many investors and economists look to the so-called “control group” figure that aligns with what the Commerce Department uses to calculate personal consumption figures that go into gross domestic product. This is made up of all sales, excluding receipts from auto dealers, building-materials retailers, gas stations, office supply stores, mobile homes, and tobacco stores. In June this rose by a stronger than expected 0.6 percent.
The report paints a complicated picture of the economy, with some sales growing stronger than thought and some slowing.
COMMENTS
Please let us know if you're having issues with commenting.