US Retail Sales beats forecasts

US Retail Sales in the U.S. rose more than forecast in July as consumer spending rebounded at department stores, auto dealers and electronics outlets, easing some concern the biggest part of the economy was foundering.

The 0.8 percent advance, the first gain in four months, followed a 0.7 percent decrease in June that was weaker than first reported, Commerce Department figures showed today in Washington. Economists projected a 0.3 percent rise, according to the median forecast in a Bloomberg survey. Sales excluding automobiles also climbed 0.8 percent.

Improved sales at merchants such as Gap Inc. and TJX Cos. indicate American households are looking beyond the global economic slowdown as hiring improves. At the same time, joblessness in excess of 8 percent is keeping consumer spending from surging, consistent with the Federal Reserve’s view that economic growth will “remain moderate over coming quarters.”

“We’re looking for consumption to pick up,” said Michael Carey, chief economist for North America at Credit Agricole CIB in New York. “There was improved consumer confidence in July plus job gains that were a little better than expected, which is certainly constructive for the household outlook.”

Stock-index futures extended gains after the figures. The contract on the Standard & Poor’s 500 Index expiring in September rose 0.3 percent to 1,406.5 at 8:48 a.m. in New York.

Retail sales, which climbed the most since February, were projected to rise following June’s previously reported 0.5 percent drop, according to the Bloomberg survey. Estimates from the 85 economists surveyed ranged from a decrease of 0.2 percent to a gain of 0.8 percent.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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