The Commerce Department reported Friday that retail sales rose slightly more than expected in June due to rising prices.
The increase in retail sales was better than expected. The 0.1% decline in May was revised higher from the initial report of a 0.3% decline.
The retail figures are not adjusted for inflation, which shows that real sales were not great.
The increase was broad based against the various metrics in the report due to rising costs for food and gas.
The monthly increase was 1%, which was better than the 0.7% estimate.
Stock futures pointed to a higher open on Wall Street. The yield on government bonds fell.
The rise in gasoline sales was due to the fact that prices at the pump briefly went over $5 a gallon.
Bars and restaurants sales increased 1%, while online and furniture and home store sales increased.
Consumers have been resilient in the face of the highest inflation rate in more than 30 years, according to the retail report.
Consumer prices in June were up 9.1% over the past year, a product of record high gas prices and spreading inflation that drove rents up to their highest monthly gain since 1986 and dental care to its biggest rise since 1995
Consumer finances have not been affected by the increases.
According to Federal Reserve data, debt to after-tax income has risen, but is still below long-term averages. The decline in the stock market resulted in a decrease in household net worth.
Economic data points have weakened.
Consumer confidence is at an all time low. Regional manufacturing surveys are showing a slowdown. Concerns about inflation and the economy were shown in a Fed survey.
Good news about manufacturing came from a New York Fed report.
The Empire State Manufacturing Survey shows the percentage difference between expansion and contraction. It was better than the estimate of a minus-2 and it was a welcome change considering supply chain problems that have helped drive inflation.
The percentage of companies seeing increases is decreasing.
A net 20.2% of companies saw worsening conditions over the next six months.
Fed policymakers have responded to the inflation issue with a series of rate increases and are expected to approve another hike later this month that could hit 1 percentage point, the largest such increase since the central bank began using its benchmark rate to implement policy.
The retails sales report will be important in determining whether to hike by 75 or 100 basis points at the July 26-27 meeting, according to the Fed Governor.
All Rights Reserved © 2024
