U.S. retail sales rose 1% in June from the previous month, from a decline of 0.1% in May, according to the Commerce Department.
Consumers picked up their spending from May to June, underscoring their resilience despite painfully higher prices at the gas pump and in grocery aisles and allaying fears that the economy might be on the verge of a recession.
The figures aren't adjusted for inflation and so largely reflect higher prices, particularly for gas. But they also show that consumers are still providing crucial support for the economy and spending on such discretionary items as furniture, restaurant meals and sporting goods.At the same time, last month's spending gain is modest enough that it likely won't encourage the Federal Reserve to raise interest rates even more aggressively.
The report showed consumers' ongoing appetite for nonessentials like gadgets and furniture. In fact, sales at furniture stores rose 1.4%, while consumer electronics stores rose 0.4%. Online sales showed a resurgence, posting a 2.2% increase. Business at restaurants was up 1%. But department stores took a hit, posting a 2.6% decline.
But spending is volatile. The latest round of retail earnings reports published in May showed some slowing of spending, particularly with low-income shoppers. RH, an upscale furniture chain, cut its sales outlook for the year last month, pointing to deteriorating macro-economic conditions. It pointed to higher mortgage rates, which are slowing sales of luxury homes, indicating that even wealthy shoppers are pulling back.
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