RISMEDIA, August 15, 2007–(MarketWatch)–U.S. retail sales showed a moderate rebound in July from what had been a weak June.
Retail sales increased 0.3% last month, the Commerce Department said Monday.
There were slight, but steady gains across a broad spectrum of sectors, the data showed. Weakness was concentrated in auto and gasoline sales.
Economists said the data was overall positive for the economic outlook.
“The retail sales report for July was not overwhelming in strength, but it showed that consumers continue to provide support to the economy,” said Mike Moran, chief U.S. economist at Daiwa Securities America Inc.
Excluding autos and gas, retail sales rose 0.6% in July after remaining unchanged the previous month.
Auto sales fell 0.3% in July, steadying after a sharp 2.9% drop in June. Excluding car sales, seasonally adjusted retail sales rose 0.4% in July.
Gasoline sales fell 0.8% in July after having fallen 1.3% in the previous month. Excluding gas, retail sales increased 0.4%.
Economists had been expecting a 0.4% gain in overall sales and 0.4% excluding autos, according to a survey conducted by MarketWatch. See Economic Calendar.
For the past 12 months, sales increased 3.2%. The figures are not adjusted for inflation. Read full government report.
In another positive sign, retail sales in June were not as weak as first reported.
Retail sales fell by a revised 0.7% in June and by 0.2% excluding autos. These compare with initial estimates pegged at 0.9% and 0.4%, respectively.
Consumer spending slowed to a 1.3% rate in the second quarter, the weakest pace since 2005. But the economic team at Action Economics said the new data is consistent with a pickup in consumer spending to a 2.8% pace in the third quarter.
Some economists believe the sorry state of the housing market and recent market volatility will dampen spending. Others, however, believe that fears of a sharp drop-off in consumer spending remains greatly exaggerated.
Crunching the July numbers
July’s brightest spot came in sales of electronics and appliances.
General merchandise store sales rose 0.9% in July. Within that category, department-store sales rose 1.6%.
Sales at leisure goods stores — such as sporting goods, music, books and hobbies — rose 0.4%.
Clothing store sales rose 1.3% in July.
At food stores, sales increased 0.4%. Restaurant and bar sales rose 1.3%
Sales at personal-care stores rose 0.7% in July after a 0.2% gain in June.
Sales at non-store outlets, such as online stores or catalogs, rose 0.4%.
Building-material sales rose 0.2% in July after a sharp 2.2% drop in June.
The biggest area of weakness was miscellaneous stores, sales for which dropped 2.8% in July after rising 3.4% in the previous month.
In a separate report, the government said retail business inventories jumped 0.5% in June.
Greg Robb is a senior reporter for MarketWatch in Washington.
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