U.S. retail sales rebounded firmly last month, Commerce Department indicated Friday, as record high gas prices and a robust job market powered broader consumer spending.
June retail sales rose 1% from the previous month to a collective $$680.6 billion, the Commerce Department said, handily beating the Street consensus forecast of a 0.8% gain. The May total was revised higher, to a decline of 0.1%, the Commerce Department report showed, from the original estimate of a 0.3% decline.
Stripping out the auto sector, June retail sales were also up 1%, the Commerce Department report noted, while stand-alone sales of gasoline surged 4.7% as prices hit consistent record highs over the month, with data from AAA showing a record high $5.017 per gallon hit during the month.
The closely-tracked control group number, which excludes autos, building materials, office suppliers, gas station sales and tobacco, rose 0.8%, more than triple the Street consensus forecast and the second-highest tally of the year.
Inflationary pressures remain acute, as well, as the Bureau of Labor Statistics’ headline June reading stormed back to 9.1%, the highest in more than forty years, with so-called core inflation rising 5.9%.
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U.S. stocks were modestly higher immediately following the data release, with futures contracts tied to the Dow Jones Industrial Average indicating a 170 point opening bell gain and the S&P 500 moving 15 points to the upside.
Benchmark 10-year Treasury note yields edged higher, to 2.961% following the data release while the dollar index was marked 0.3% lower on the session at 108.208 against a basket of six global currencies.
Consumer strength will remain a key factor in the U.S. avoiding recession this year, with investors focused not only on the pace of retail sales but also a mixed set of data from the labor market.
Jobless claims rose to an eight-month last week, Labor Department data indicated Thursday, with new applications for unemployment benefits pegged at 244,000.
That followed a June employment report that showed 372,00 net new jobs were added to the economy last month, as well as a Jolts report showing that around 11.3 million positions went unfilled over the month of May.
“The consumer right now is in great shape,” JPMorgan CEO Jamie Dimon told investors yesterday after his bank’s muted second quarter earnings report. “So even we go in a recession, they’re entering that recession with less leverage in far better shape than they’ve been — did in ’08 and ’09 and far better shape than they did even in 2020. And jobs are plentiful.”
“Things happen. But they’re in very good shape.”