U.S. retail sales rose more than expected in June as Americans bought motor vehicles and a variety of other goods, reinforcing views that economic growth picked up in the second quarter.
Other data on Friday showed consumer prices increasing for a fourth straight month in June on rising housing, gasoline and healthcare costs, indicating a steady build-up in inflation. The stream of upbeat data and a rally on Wall Street could allow the Federal Reserve to raise interest rates later this year.
“The Fed will welcome the continued strength in consumer spending and the latest positive jobs report, but it’s clearly in zero rush to tighten policy,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “These two reports might increase the odds of a September rate increase at the margin.”
The Commerce Department said retail sales increased 0.6 percent last month after gaining 0.2 percent in May. It was the third straight month of increases and lifted sales 2.7 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales shot up 0.5 percent after advancing 0.5 percent in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.