Retail sales rebounded in June, signaling that President Trump’s tariffs have yet to have a significant impact on consumer spending patterns.
Core retail sales rose 0.6% in June, beating economists’ expectations for a 0.1% increase month-on-month. By comparison, sales fell 0.9% in May, based on revised data from the US Census Bureau.
Thursday’s data, which excludes some highly volatile categories used in calculating quarterly gross domestic product (GDP), rose 0.5%, compared with a 0.2% increase in May. Economists had expected a 0.3% increase.
June sales excluding vehicles and fuels rose 0.6%, compared with economists’ expectations for a 0.3% increase. In May, this category was unchanged. The biggest gains were in retail sales (1.8%) and auto and parts dealer sales (1.2%).
Capital Economics North America economist Thomas Ryan wrote in a research note that Thursday’s data should “allay any concerns that overall consumer spending is being dented by tariffs.”
In other data also released Thursday morning, the Labor Department reported 221,000 new claims for unemployment benefits were filed for the week ended July 12. After rising in May, the weekly number of claims is now at a three-month low.
The report comes as investors remain on the sidelines of a rate cut by the Federal Reserve, despite data earlier this week showing inflation remains high.
Investors are currently pricing in a 54% chance that the Fed will cut rates by its September meeting, down from a 70% estimate last week, according to the CME FedWatch tool.
