Autos and parts drive surge in US July retail sales

15th Aug 2024 12:30

(Sharecast News) - Retail sales jumped last month, driven by a rebound in auto purchases.

According to the Department of Commerce, in seasonally adjusted terms, retail sales volumes shot 1.0% higher month-on-month to reach $709.7bn.

That followed a revised 0.2% decline in June (Preliminary: 0.0%), but was more than twice the 0.3% gain projected by economists.

Excluding motor vehicles and parts, sales of which soared by 3.6% in comparison to June, after a 3.4% drop during the previous month, retail sales were up by a more modest 0.4%.

In June, retail sales excluding those of autos and parts had been up by 0.5%.

Sales of electronics and at appliance stores were also very strong in July, growing by 1.6%, while those of building materials, and at food and beverage stores, rose by 0.9% each.

Sales at non-store retailers on the other hand edged up by only 0.2%.

In year-on-year terms, total retail sales were up by 2.7%.

"Real incomes growth is softening as both pay and job growth slows but should remain fast enough to support spending," said Michael Pearce, deputy chief US economist at Oxford Economics.

"The solid state of households' balance sheets, with households carrying less debt than pre-pandemic while wealth has risen sharply, continues to underpin spending, particularly among higher-income households. Lower interest rates should begin to boost spending next year."