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.
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