Retail sales rise more than expected in June
Headline retail sales rose 0.6% in June, above economists' expectations for a 0.1% increase month on month. By comparison, sales decreased 0.9% in May, according to revised Census Bureau data.
Capital Economics North America economist Thomas Ryan wrote in a research note that Thursday's release should "dispel any fears that overall consumer spending is faltering in response to tariffs."
The control group in Thursday's release, which excludes several volatile categories and factors into the gross domestic product (GDP) reading for the quarter, rose 0.5%. That compares with a 0.2% increase seen in May. Economists expected a 0.3% increase.
June sales, excluding auto and gas, increased 0.6%. Economists had expected a 0.3% rise. In May, sales excluding auto and gas were flat. A 1.8% increase in miscellaneous store retailers and a 1.2% gain in motor vehicle and parts dealer sales led the gains in June.
'Delayed tariff price increases and steady income growth continue to fuel spending despite weak survey data indicating building concerns by households," Nationwide senior economist Ben Ayers wrote in a note to clients. "The strong June for retail sales should support a solid rebound for real GDP growth in the second quarter but weaker activity is still likely over the second half of the year as tariff uncertainty hangs over the outlook.'
Also out Thursday morning, data from the Department of Labor showed 221,000 initial jobless claims were filed in the week ending July 12. After picking up in May, weekly filings for unemployment claims are now at their lowest level in three months.
Read more: What are jobless claims, and why do they matter?
The release comes as investors have held their bets on Federal Reserve interest rate cuts steady despite data earlier this week showing signs of sticky inflation.
As of Thursday morning investors were pricing in a 54% chance the central bank cuts interest rates by its September meeting, down from a roughly 70% chance seen just last week, according to the CME FedWatch Tool.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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