Retail sales exceed expectations with a 0.6% jump in June

Americans continued to spend in June despite the impact of President Donald Trump's tariffs. Retail sales increased by 0.6% from the previous month, bouncing back from a 0.9% decline in May. The growth exceeded economists' expectations of a 0.2% gain. Sales rose in various categories, with car dealerships experiencing a significant 1.2% increase.

Although not adjusted for inflation, retail sales saw a more modest 0.3% growth after factoring in a 0.3% rise in consumer prices. Notably, spending at restaurants and bars also increased by 0.6% in June, indicating that Americans are still willing to spend on discretionary items.

The 'control group,' which excludes certain categories to provide a clearer spending picture, showed a 0.5% increase in June, surpassing economists' forecasts. Despite concerns about tariffs pushing prices up, consumer spending remains a crucial driver of the US economy.

Businesses reported a slight softening in consumer spending in early July, with consumers seeking bargains. However, some retailers, like discount stores and warehouse clubs, saw robust sales gains. A resilient labor market, with low unemployment rates and steady job additions, suggests a positive outlook for consumer spending.

Unemployment benefits applications declined for the fifth consecutive week, reaching a historically low level. In June, employers added 147,000 jobs, surpassing economists' expectations. However, unemployed workers are facing challenges in finding new jobs in a slow-hiring market.

According to the source: CNN.