US Retail Sales Rises 0.6 Percent in June

A gauge of U.S. consumer spending rose solidly in June, in the latest sign that the economy ended the second quarter on a firmer footing.

That momentum appeared to have carried into the third quarter, with other data on Tuesday showing factory activity in New York state expanded sharply in July.

The Commerce Department said core sales, which strip out automobiles, gasoline, building materials and food services, increased 0.6 percent last month after rising by an upwardly revised 0.2 percent in May.

Core sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported as being flat in May and economists had expected them to rise 0.5 percent in June.

U.S. stock index futures extended gains on the data, while prices for U.S. Treasury debt were little changed.

June’s gains and May’s upward revision suggested an acceleration in consumer spending in the second quarter after it was held back by weak healthcare spending in the first three months of the year.

A surprise drop in receipts for automobiles, however, saw overall retail sales rise only 0.2 percent in June after a 0.5 percent advance in May.

While the rise in retail sales lagged economists’ expectations for a 0.6 percent increase, June’s report added to signs of the economy’s strengthening fundamentals, which could buoy optimism the recovery is on a self-sustaining path.

The economy contracted sharply in the first quarter, but that was probably a temporary setback.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza