WASHINGTON, (Reuters) – US retail sales rose in July when consumers bought a variety of goods, even as they cut down on car purchases, which could help calm financial markets' concern that the economy was heading into a recession .  The Commerce Department said Thursday that retail sales rose 0.7% last month. June data was revised down slightly to show retail sales gain 0.3% instead of increase 0.4% as previously reported.
Economists polled by Reuters had predicted retail sales would rise 0.3% in July. Compared to July last year, retail sales increased by 3.4%.
Excluding cars, gasoline, construction products and food service services, retail sales rose 1
Christmas's core sales gain indicated strong consumer spending early in the third quarter, although the pace is likely to slow from the April-June quarter's robust 4.3% annual interest rate. Consumer spending, which accounts for more than two-thirds of the economy, is supported by the lowest unemployment rate in nearly half a century.
This is something that beats some of the hits on the economy from a downturn in the industry, which is underlined by weak business investment. The economy grew at an interest rate of 2.1% in the second quarter and declined from the rate in the first quarter of 3.1%. Growth projections for the third quarter are below an interest rate of 2.0%.
The data is unlikely to change expectations that the Federal Reserve will cut interest rates again next month, as the outlook for the economy continues to dwindle as trade tensions slow down growth abroad.
A key part of the US Treasury curve was reversed on Wednesday for the first time since June 2007, triggering the sale of shares. An inverse return curve for the Treasury has historically been a reliable predictor of looming economic downturns.
The financial markets have fully priced in with a 25-point interest rate cut at the US Central Bank's political meeting on September 17-18. The Fed lowered its short-term interest rate by a quarter-point last month, citing the fierce US and Chinese trade wars and slowing global economies.
Car sales fell 0.6% in July after rising 0.3% in June. The receipts at the gas stations dropped 1.8%, reflecting higher gasoline prices. Sales of hardware stores increased 0.2%.
Revenue in clothing stores increased 0.8%. Retail sales on the Internet and mail order rose 2.8%, mostly in six months, after rising 1.9% in June. They were probably boosted by Amazon.com Inc (O 🙂 Prime Day. Receipts in furniture stores rose 0.3%.
Sales of restaurants and bars increased 1.1%. But spending on hobby, musical instrument and bookstores fell 1.1% last month.
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