Retail Sales Jump 0.8% in July; First Increase in Four Months
Comstock/Thinkstock(WASHINGTON) -- Retail sales increased 0.8 percent last month with department stores, auto dealerships and electronics outlets reporting stronger than expected sales, according to a report from the U.S. Commerce Department. It is the first time retail sales have increased in four months.
“Sales are coming back,” said Diane Swonk, chief economist at Mesirow Financial in Chicago, “but off a very low base. And we're still digging ourselves out of the trench that we dug during the Spring months.”
Increased spending could be a sign that consumers are gaining confidence in the economy.
But compared to last year, the economy is still barely growing, Swonk said, and these latest numbers were fueled mostly by upper-income households.
“What we've seen is middle and lower income households appear to be hurting worse this back to school season as we move into August, where higher income households are doing a little better and trying to make up for some of that slack,” Swonk said. “Of course the unevenness of retail sales across price points and sectors is where the story is going into the election.”
Drought conditions and high temperatures likely contributed to strong online sales, Swonk said.
Higher prices for fuel and food could keep spending tepid in the coming months.
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