US consumers spent more at retail stores and restaurants in July, a sign that concerns over weakening economic growth and a persistent trade dispute that have rattled financial markets have not dampened the American consumer’s confidence.
Retail sales rose a healthy 0.7% last month after a 0.3% gainer in June, the Commerce Department said Thursday.
Online retailers, grocery stores, clothing retailers and electronics and appliance stores all reported strong gains.
Consumer spending, the primary driver (at 72%) of the US economy, appears healthy even as other sectors such as business investment, have weakened amid growing uncertainty over the US-China trade dispute.
Job growth is steady, the unemployment rate is at a 50-yr low, and wages are rising modestly, which bolsters Americans’ spending power.
Even department stores reported solid sales increases despite Wednesday’s anemic earnings report by Macy’s (NYSE:M). And Walmart (NYSE:WMT), the world’s largest retailer, reported sales gains, lifted in part by brisk online grocery deliveries.
Thursday’s retail figures should allay some concerns about the potential for a recession that would end the 10-year US recovery, the longest on record.
Most economists, including our Shayne Heffernan PhD are not forecasting recession, in part because consumer spending and the job market remain strong.
President Trump acknowledged this week that tariffs on Chinese imports could raise prices for American shoppers during the holiday season and delayed more than 50% his planned 10% tariffs on Chinese goods from 1 September to 15 December. President Trump cited the potential impact on holiday shopping as the reason for the delay.
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