Economic growth braced by healthy shopping pace
Upbeat consumers give 0.5% jolt to July sales
WASHINGTON — Americans shopped at a healthy pace in July, buying more cars, clothes and appliances, evidence that consumers are helping drive robust economic growth.
Retail sales rose at a 0.5 percent annual rate in July, after a 0.2 percent increase the previous month, the Commerce Department said Wednesday. June’s increase, though, was revised lower from a previous estimate of a 0.5 percent annual rate.
Consumers appear to be feeling upbeat and are in overall solid financial shape. The unemployment rate is near an 18-year low. And economic growth, along with hiring, has accelerated.
Sales last month rose at auto dealers and grocery stores and jumped at clothing shops.
Spending at restaurants and bars has jumped nearly 10 percent from a year earlier. That’s a bigger increase than for online shopping, which rose 8.7 percent from a year ago.
It also bolsters the notion that many Americans feel they have enough money to spend on non-necessities.
“Restaurants are a highly discretionary category, and continued strength suggests that households are not too worried about higher gas prices and that tax cuts are providing a cushion against higher expenses at the pump,” Ellen Zentner, an economist at Morgan Stanley, said in a research note.
Department stores, which have suffered falling sales and bankruptcies for much of the past two years, reported a surprisingly healthy sales gain of 1.2 percent. Macy’s said Wednesday that sales at stores that have been open for at least a year rose unexpectedly in the quarter that ended Aug. 4, its third straight quarterly gain.
The solid spending figures coincide with other data suggesting that American households are in decent financial shape. The government last month revised the savings rate sharply higher, to 7.2 percent in the first quarter from 3.3 percent. And fewer people are falling behind on their loans.