Car buyers and Prime Day give June retail sales a lift
U.S. retail sales rose 0.2% in June, with stronger spending outside gas stations as autos and online deals helped carry consumers.
By Sal Moretti · Money Reporter
2 min read
Americans kept shopping in June, with new-car purchases and Amazon’s summer Prime Day promotion helping retailers post another monthly gain, according to U.S. government data released Thursday.
Retail sales increased 0.2% for the month, the report said. Strip out gas stations, where lower pump prices weighed on receipts, and sales climbed a stronger 0.7%.
The figures are adjusted for seasonal swings and are watched closely because retail sales make up a large part of consumer spending. Consumer spending remains the main engine of U.S. economic growth.
MarketWatch reported that the gain was driven in large part by faster spending on new vehicles and online purchases tied to Amazon Prime Day. The annual shopping event gave e-commerce a timely jolt, while auto buyers added support at dealerships.
Cheaper gas changed the math
Gasoline was the odd piece of the June report. MarketWatch reported that gas prices fell 15% from mid-May through the end of June after the U.S. and Iran agreed to a temporary pause in hostilities to allow peace talks.
Lower fuel prices can reduce sales totals at gas stations even when drivers are still filling up. That is why the report’s stronger reading excluding gas stations offered a clearer look at broader consumer demand.
MarketWatch noted that gas prices could rise later in the month after hostilities resumed. So far, the report said, oil prices had not climbed much compared with levels seen in the spring.
Economy still has support
The retail report landed against a mixed economic backdrop. MarketWatch cited high inflation, slower job creation and elevated mortgage rates as pressures on households and the housing market.
Even with those strains, the report said the U.S. economy was still expanding at a solid pace. It also said growth could strengthen if the Iran conflict is resolved.
Low layoffs and low unemployment are helping consumers keep spending, according to MarketWatch. The report also pointed to heavy business investment in new technologies as another source of support for the economy.
For now, the June numbers suggest households are still spending enough to keep the economy away from immediate trouble, despite higher prices and a housing market held back by costly loans.
On Wall Street, MarketWatch reported that the Dow Jones Industrial Average and the S&P 500 were set for a mixed open in Thursday trading after the retail data was released.
This story draws on original reporting from MarketWatch.