U.S. consumer optimism helps boost retail sales

July saw 0.7% rise after 0.3% gain in June, Commerce Department says.

WASHINGTON — Americans spent more at retail stores and restaurants in July, a sign that concerns over weakening economic growth and a persistent trade war that have roiled financial markets have yet to dampen consumer confidence.

Retail sales rose a healthy 0.7% last month after a 0.3% gain in June, the Commerce Department said Thursday.

Online retailers, grocery stores, clothing retailers and electronics and appliance stores all reported strong gains.

Consumer spending, the primary driver of the U.S. economy, appears healthy even as other sectors of the economy, such as business investment, have weakened amid growing uncertainty over the U.S.-China trade conflict. Job growth is steady, the unemployment rate is near a 50-year low, and wages are rising modestly, which bolsters Americans’ spending power.

“The consumer is playing Atlas, shouldering overall economic growth again in the third quarter,” said Diane Swonk, chief economist at Grant Thornton, a tax advisory firm. “The key is employment. That will ultimately determine how we weather the trade storm.”

Sales in a category that is mostly made up of online retailers jumped 2.8% last month, the largest increase since January. That figure was likely boosted by Amazon’s Prime Day sale for its members on July 15.

Online sales have soared 16% in the past 12 months, compared with a 3.4% rise for overall retail sales.

A separate report showed that factory production declined 0.4% last month, continuing a string of negative readings, driven lower by falling output of autos, fabricated metals and wood products.

Manufacturing output has now fallen 0.5% in the past year.

MARK LENNIHAN / AP Walmart Inc. reported results Thursday, and shares rose as much as 7%, the most intraday since last August. Comparable sales excluding fuel for Walmarts in the U.S. rose 2.8% in the second quarter.