Retail Sales See Largest Increase Since April
NATIONAL REPORT -- In a positive financial sign, the U.S. Department of Commerce reported that retail sales increased by a seasonally adjusted 0.5 percent in July, according to a MarketWatch report. A group of surveyed economists had expected overall sales to increase by 0.7 percent.
The increase indicates that consumers are still willing to spend and contribute to economic growth amid fears of a renewed recession. The news boosted stocks in Friday trading, although another report that said consumer confidence has fallen sharply in the last month caused market gains to taper off, according to the report.
"The solid July retail sales report should help allay recession fears," said Sal Guatieri, senior economist at BMO Capital Markets.
Additionally, sales for May were revised to be flat instead of down 0.1 percent, and sales for June were revised to be up 0.3 percent instead of the originally projected 0.1 percent gain. In the past three months, retail sales have jumped 8.2 percent over the same three-month period in 2010.
The greatest increase in sales took place at gas stations, at 1.6 percent. However, the report noted this is not necessarily a positive sign as fuel purchases leave consumers with less money to spend on preferred goods and services.
Excluding automobile sales, which often sharply increase or decrease, retail sales exceeded the previous 0.3 percent MarketWatch-predicted gain and reached 0.5 percent. Electronics and appliance sales rose 1.4 percent, and furniture stores, clothing stores and grocery and liquor markets each saw sales rise 0.5 percent, while sales dropped at department stores, bars and restaurants, leisure and hobby stores, and building-materials suppliers.
The data was collected from polls sent to up to 5,000 firms that account for two-thirds of all U.S. retail purchases, according to the report.