U.S. Retail Sales Edge Higher, Control Group Shows Strength

U.S. retail sales rose 0.2% in June, matching economist forecasts. The headline number was held back by a 5.3% drop at gasoline stations, which reflected lower prices at the pump. Strip out the price effect, and real gasoline sales rose 4.9%.

The control group, which strips out volatile categories like gasoline and autos, advanced 0.5%. Sales at sporting goods stores jumped 1.3%, and electronics and appliance retailers gained 0.8%. Non-store retailers, a proxy for online shopping, climbed 1.9% and are up 14.2% from a year ago.

Auto sales remained strong, rising 1.9% for the month and 3% in the second quarter. That represented a sharp acceleration from the prior two quarters. Building materials and garden supply stores were little changed, up 0.1%.

On an inflation-adjusted basis, retail sales rose 0.6% in June. TD Bank said the report suggests consumer spending is on track to increase at about a 2% annualized rate in the second quarter, a pickup from the first quarter's 0.5% pace.

Some categories showed weaker demand. Sales at food and beverage stores and general merchandise stores were little changed. Health and personal care stores slipped 0.8%. Spending at bars and restaurants, the only service sector in the retail sales report, was flat in June and up just 3.8% from a year earlier, down from 6.8% growth a year ago.

The data followed a June CPI report that showed price pressures easing. The reports point to a consumer that is still spending despite higher energy costs. Rising equity valuations and bigger tax refund checks helped offset the drag, according to TD Bank.