Best U.S. Retail Sales Predictions

U.S. retail sales rose in June more than expected in a broad advance, suggesting resilient consumer spending despite decades of high inflation and raising the outlook for an even bigger interest rate hike of the Federal Reserve this month.

The value of overall retail purchases rose 1%, after an upward-revised decline of 0.1% in May, Commerce Department figures showed on Friday. Figures are not adjusted for inflation.

The median estimate from a Bloomberg survey of economists called for a 0.9% increase in overall retail sales from the previous month.

Although the numbers are not price-adjusted, the better-than-expected results indicate that consumer demand is holding up despite Federal Reserve policy aimed at containing it.

Fed officials are watching retail sales data, along with other releases due Friday and next week, to determine whether to raise interest rates by 75 basis points at their meeting. later this month, or consider a bigger hike of 100 basis points.

Two-year Treasury yields jumped after the report, while US stock futures fell and the dollar pared its losses.

According to the report, nine of 13 retail categories saw increases last month, including furniture stores, e-commerce and sporting goods stores.

Sales at gas stations rose 3.6%, following a 5.6% advance the previous month, and led by a spike in gasoline prices to over $5 a gallon in mid-June . Prices have fallen sharply since, suggesting the numbers could soften in July data.

Automobile sales rose 0.8% in June, following a decline in May.

Grocery store sales rose 0.6%, likely reflecting higher prices rather than increased shopping activity since the numbers are not adjusted for inflation. Food prices, along with gasoline and housing, were among the top contributors to the CPI in June.

Restaurant sales, the only services component of the report, rose 1%.

So-called control group sales – which are used to calculate gross domestic product and exclude food services, car dealerships, building supply stores and gas stations – rose 0.8% in June, the biggest increase since January.

By Olivia Rockman

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