Retail sales rose a better-than-expected 0.6% in June after declining 0.9% in May, the Commerce Department said Thursday. Sales in April fell 0.1%, pulled down by a steep drop in auto sales, after Americans ramped up their car-buying in March to get ahead of President Donald Trump’s 25% duty on imported cars and car parts.
Excluding autos and automotive parts, sales rose 0.5%, according to the Commerce Department.
There were a few weak spots like electronics and appliance retailers and department stores, both of which had sales declines.
“Don’t count the American consumer out yet,” said Long in a statement. “There’s still a lot of trepidation about tariffs and likely price hikes, but consumers are willing to buy if they feel they can get a good deal. The word of the summer for the economy is resilient.”
The latest government report showed that inflation rose last month to its highest level since February as Trump’s sweeping tariffs push up the costs of everything from groceries and clothes to furniture and appliances.
Consumer prices rose 2.7% in June from a year earlier, the Labor Department said Tuesday, up from an annual increase of 2.4% in May. On a monthly basis, prices climbed 0.3% from May to June, after rising just 0.1% the previous month.
Americans have continued to spend, which is what the Fed had hoped to curtail a little bit with rate hikes.
Deborah Weinswig, founder and CEO of Coresight Research, said she’s becoming more optimistic about the financial health of the consumer after the Amazon Prime events. She said inventories are at a healthy level, and she didn’t see big fire sales.
”People aren’t buying things that they don’t need,” she said. “I think it’s a healthier retail environment.”
Retailers are now turning their attention to the back-to-school shopping season, which is the second largest consumer rush after the winter holidays. Coresight Research estimates that total U.S. back-to-school spending will increase by 3.3% year compared with the year-ago period, to $33.3 billion. And it predicts that shoppers will do a big chunk of their shopping before August to get ahead of tariffs.
Economists will also dissect quarterly financial reports next month from major retailers like Walmart, Target and Macy’s, both for consumer behavior and to gauge how businesses are navigating a chaotic period of global trade due to fluid U.S. policies.
