US Retail Sales Rose Solid 0.8 Percent In July

By MARTIN CRUTSINGER and ANNE D'INNOCENZIO

WASHINGTON (AP) ⿿ Americans increased their retail spending in July by the most in five months, opening their wallets after a frugal spring and offering hope that the slumping economy may rebound in the second half of the year.

Retail spending rose in every major category, from electronics and sporting goods to furniture, building supplies and garden equipment. The report from the government followed one earlier this month that showed hiring strengthened in July.

Overall retail sales rose 0.8 percent from June to July, the Commerce Department said. It was the sharpest increase since February, and it followed three months of declines.

The stepped-up spending was evident in a flurry of retail earnings reports for the second quarter, which ended in late July.

Home Depot, the nation's largest home improvement retailer, said healthy sales of paint, bathroom accessories and kitchen installations helped lift its net income 12 percent.

Macy's raised its annual earnings guidance last week after reporting a 16 percent increase in net income in the second quarter. Macy's executives specifically cited a pickup in their teen clothing business, which had been weak.

TJX Cos., which sells discounted brand names under such store banners as T.J. Maxx and HomeGoods, said its second-quarter net income jumped 21 percent on better same-store sales.

"People are spending a little more and feeling a little better about the economy," said James Donnelly, a sales associate at Boston-based Tadpole, which sells infant wear, children's clothing and toys.

Donnelly says he's seen an increase in business and traffic in recent weeks. The store has run 40 percent discounts on summer merchandise. Shoppers are also buying some back-to-school items, like backpacks and clothing.

Americans appear to be taking their cues from the economy's modest but steady improvements.

Employers added 163,000 jobs in July, the best month for job growth since February. Home prices are up. The value of U.S. exports reached a record high last month. U.S. consumers are expressing more confidence. And stock indexes are near their highs for the year.

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