U.S. Retail Sales Rise 0.2 Percent as Gas Prices Mask Stronger Consumer Spending
U.S. retail sales rose modestly in June, showing a consumer economy that is slowing in places but has not cracked.
The Census Bureau reported Thursday that retail and food services sales increased 0.2 percent in June to $768.6 billion. Sales were up 6.7 percent from a year earlier, and May’s gain was revised higher to 1.0 percent. The figures are adjusted for seasonal patterns but not for inflation.
The headline number understated some of the underlying strength. Gas station receipts fell sharply as fuel prices declined, pulling down the overall figure. Excluding gas stations, retail sales rose 0.7 percent, according to AP. The control group used in GDP calculations rose 0.5 percent.
Consumers also shifted where they spent. Motor vehicle and parts dealers rose 1.9 percent, while online sales increased 1.9 percent, helped by Amazon’s earlier Prime Day promotions. Clothing, grocery, and health and personal care categories weakened, suggesting shoppers are becoming more selective.
Subscribe free for daily political analysis they won’t broadcast. Join 110K+ readers →
That selectivity is the core of the story. Lower gas prices gave households some relief, but inflation, slower wage growth, low savings, and credit reliance remain pressure points. Reuters reported that economists expect spending to slow in the third quarter as those supports fade.
The report also lands directly in the Federal Reserve’s policy debate. Stronger consumer demand supports growth, but it can make inflation harder to bring down. Axios noted that resilient spending complicates the Fed’s judgment about how quickly inflation can ease.
For now, June’s report points to a cautious consumer, not a collapsing one.
Subscribe free for daily political analysis they won’t broadcast. Join 110K+ readers →