Broad gains across retailers as sales beat expectations
|Summary
Strong June retail sales show consumers may have been spooked by tariffs, but they haven't fully gone into hiding. The fact that June is a slower month and that goods outlays comprise a fraction of overall outlays means that we are not completely rethinking our forecast for a soft second half for consumer spending.
Source: U.S. Department of Commerce, U.S. Department of Labor and Wells Fargo Economics
Is consumer spending really on better footing?
Retailers had a much better-than-expected month in June. Overall sales rose 0.6% which was significantly better than the scant 0.1% pick-up that had been expected by the 65 forecasters contributing to the Bloomberg consensus. While a 1.2% increase in auto sales certainly helped lift the headline, it is not as though that category carried the day. Almost all major store types raked in more sales in June. After auto sales, gains in other major categories included building material & garden stores (+0.9%), bars & restaurants (+0.6%) and e-commerce (+0.4%).
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