Americans splash the cash in July as retail sales rise

Aug 17, 2017, 12:38
Americans splash the cash in July as retail sales rise

Consumers boosted purchases of motor vehicles as well as discretionary spending, increasing the Commerce Department's reading on sales by 0.6 percent.

Analysts, who had been expecting an increase of only 0.3 per cent in July, said the result was a strong start to growth in the third quarter.

"Admittedly, that was in part due to a 1.3% surge in non-store sales, presumably reflecting Amazon's Prime Day, which reportedly saw USA orders rise 50% from the same event a year ago".

Other sectors showing particularly strong growth in addition to non-store retailers and home furnishings stores included building material and garden and supplies stores (up 8.3% from July a year ago) and automobile dealers (up 6.1%), the report said.

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The May 2017 to June 2017 percent change was revised from down 0.2% to up 0.3%.

Long-suffering department stores likewise showed signs of life, but cheap gasoline and falling sales of electronics and clothing still weighed on sales last month.

Economists have been expecting the US economy to pick up steam in the second half of the year and that view got some support from the latest retail sales report - with a bit of help from Amazon.

A mysterious decline in spending at the end of the second quarter, meanwhile, vanished after fresh government revisions based on newly incorporated sales data.

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Retail sales increased 0.6% from June, the largest gain since December 2016 and better than a consensus estimate from Wall Street.

Non-store retailers, which includes online shopping, reported sales increased 1.3% in July from the month before, while recording a whopping 11.5% compared to July 2016.

It earlier touched its highest level since July 26.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 2.8 per cent annualised rate in the second quarter.

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Sales at restaurants and bars rose 0.3 per cent. Receipts at sporting goods and hobby stores also increased 0.3 per cent.