Financial News: U.S. Retail Sales Rise 0.2% In June As

U.S. Retail Sales Rise 0.2% In June As Auto Sales Jump, Gas Station Sales Plunge

(RTTNews) - Largely reflecting a surge in sales by motor vehicle and parts dealers, the Commerce Department released a report on Thursday showing a modest increase in U.S. retail sales in the month of June.

The Commerce Department said retail sales crept up by 0.2 percent in June after climbing by an upwardly revised 1.0 percent in May.

Economists had expected retail sales to rise by 0.3 percent compared to the 0.9 percent increase originally reported for the previous month.

The modest increase in retail sales came as sales by motor vehicle and parts dealers shot up by 1.9 percent in June after jumping by 1.1 percent in May.

Excluding sales by motor vehicle and parts dealers, retail sales dipped by 0.2 percent in June after leaping by 1.0 percent in May. Ex-auto sales were expected to edge down by 0.1 percent.

A steep drop in sales by gas stations weighed on ex-auto sales, with gas station sales plunging by 5.3 percent in June after surging by 2.6 percent in May amid a pullback in gasoline prices.

Sales by health and personal care stores also slumped, while sales by electronics and appliance stores, sporting goods, hobby, musical instrument and book stores and non-store retailers saw notable growth.

The report said retail sales excluding sales by both motor vehicles and parts dealers and gas stations rose by 0.4 percent in June after climbing by 0.8 percent in May.

The Commerce Department also said core retail sales, which exclude automobiles, gasoline, building materials and food services, grew by 0.5 percent in June after increasing by 0.8 percent in May.

"The strength in underlying retail sales in June, coupled with upward revisions to past months, leaves real consumer spending on track for a 2.5% annualized gain in Q2 after growth of 0.5% in Q1," said Michael Pearce, Chief U.S. Economist at Oxford Economics.

"Elevated gas prices have taken a bite out of real incomes and may yet feed through to a moderation in spending growth," he added. "However, spending remains well supported by a stabilizing labor market and a powerful tailwind from rising financial wealth."

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