The American economy was hotter than the weather in July as retail sales rose far above estimates.
The Commerce Department reported Wednesday that retail sales increased 0.5 percent last month over June’s figures. Economists polled by Reuters had predicted only a 0.1 percent increase, CNBC reported.
Sales rose 6.4 percent over July 2017, The Wall Street Journal reported.
US economy powers ahead! Retail retail sales rise more than expected in July. YoY sales growth 6.4%, biggest gain since February 2012. pic.twitter.com/SxBGGNvsF0
— jeroen blokland (@jsblokland) August 15, 2018
One of the biggest increases came in online and mail-order retail sales, which rose 0.8 percent. Amazon’s “Prime Day” promotion was cited as a factor in that increase, Reuters reported.
The “recent positive spending trend has been underpinned by a tight labor market and lower taxes resulting in strengthening disposable personal income growth,” Sam Bullard, senior economist at Wells Fargo Securities LLC, said, according to Bloomberg.
The one cloud in the data was a revision to June’s numbers that showed June sales increasing 0.2 percent over May instead of 0.5 percent, which had been initially reported.
Cars, clothes and appliances were cited as major areas of retail growth in July. Car sales rose 0.2 percent in July after increasing 0.1 percent in June. Sales at clothing stores jumped 1.3 percent in July, almost erasing a 1.6 percent dip in June.
Americans are not just shopping. They are also saving.
The government last month said Americans saved 7.2 percent of their wages in the first quarter and that fewer people are behind on loans. Those are signs that consumers are in good financial health, one expert said.
“It gives us comfort that consumers are nowhere near to being as overstretched as they were in the years heading into the Great Recession,” said Michael Feroli, an economist at JPMorgan Chase, according to ABC.
Great financial numbers being announced on an almost daily basis. Economy has never been better, jobs at best point in history. Fixing our terrible Trade Deals is a priority-and going very well. Immigration on Merit Based System to take care of the companies coming back to U.S.A.
— Donald J. Trump (@realDonaldTrump) August 6, 2018
Retail growth comes amid President Donald Trump’s battles with China and other nations over trade. The Washington Examiner reported that several top executives see little impact from the disputes.
“We are working with our suppliers to find the best country to provide from, but at this point we have been able to pass it along into the marketplace,” Mike Broderick, the executive vice president for merchandising at Advance Auto Parts, told analysts Tuesday. “So, it’s really been not much of an issue at this point in time.”
An official at The Home Depot said dealing with a changing tariff environment was just part of doing business.
Ted Decker, executive vice president for merchandising at The Home Depot said, “as the customer’s advocate for value, it is our job to work with our partners throughout the value chain to manage these pressures.”
His boss agreed, according to the Examiner.
“I would say, at this point, that the tariff environment is manageable — and given our sales and our size and scale, it’s even that much more manageable,” said The Home Depot’s Chief Executive Officer Craig Menear.
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