The consumer powered what little growth there was in the first half of the year, so Friday’s July retail sales is an important look at the economy’s engine at the start of the second half.
Retail sales are expected to grow by 0.5 percent, or 0.1 percent if automobiles are excluded. There is also PPI producer price inflation at 8:30 a.m. EDT. Consumer sentiment and business inventories are both at 10 a.m. Earnings are expected from J.C. Penney.
“The consumer in the second quarter was just off the charts. You can’t expect it to be as robust in the second half of the year,” said John Canally, economist and market strategist at LPL Financial. Canally said consumer spending grew at about 3 percent in the first half while GDP growth averaged 1 percent. He expects consumer spending to slow down to 2.5 percent in the second half.