Updated from 9:50 a.m. EDT
posted a larger-than-exected gain in June, as consumers continued to spend merrily despite signs of a slowdown in the U.S. economy last quarter.
According to figures released Friday by the
, retail sales rose 0.5% in June from the month before. Excluding automobiles, retail sales rose 0.2%.
Expectations were for a rise of 0.4% for the overall number and an identical jump of 0.4% excluding autos, according to a
Surprisingly, the numbers for
May were revised upward by a significant amount, with retail sales changed upward to an increase of 0.3% from a decrease of 0.3%. The core rate, which excludes automobile sales, was revised to a rise of 0.5% after initially recording no change.
The strong sales data cast some doubt on talk of a significant slowdown in U.S. economic activity. The rebound in retail sales, combined with a renewed downtick in
June unemployment and renewed demand for
big-ticket manufactured goods could indicate that the economy will show renewed strength.
"Not good news," wrote Oscar Gonzalez, an economist at
John Hancock Financial Services
, in a report published Friday, "but not too worrisome in a quarter-to-quarter context, which still shows a gradual softening."
The Federal Reserve has raised short-term interest rates, which influence consumer rates such as credit cards and mortgages, six times in the past year in an attempt to slow consumer demand and avoid inflation. At its most recent meeting, however, the Fed left rates unchanged, citing "tentative and preliminary" signs of an economic slowdown. Given the rebound in some areas of the economy, however, economists are now mixed on whether the Fed will move rates when it meets again in August.
In June, overall retail sales were pushed higher by a solid 1.5% rise in auto sales, helped by dealer promotions aimed at luring car buyers after sales
sagged in May. Auto sales had fallen 0.3% in May, revised from an earlier 1.3% drop.
Auto sales were up 1.5%, after falling 0.3% in May, revised from an earlier 1.3% drop. Durable goods increased 0.7% from May.
Few decreases were reported, with home furniture posting a 0.3% drop, drug stores down 0.8% and building materials down 1.6%.
The largest drop was recorded by clothing sales, which fell 1.9% from a rise of 1% last month, pointing to signs that overall growth at the nation's largest store chains are feeling the effects of rising interest rates and higher gasoline prices. The Commerce Department figure underscores the weaker-than-expected sales
reported by both chain stores that specialize in apparel and large department store chains.
Producer Price Index , a measure of wholesale prices, was also released Friday, and showed a sharp 0.6% increase in overall prices due to surging energy costs. But excluding energy prices, wholesale prices dipped due to lower prices for food, tobacco and automobiles.