Stock Futures Jump After Retail Sales Blow Past Forecasts
Wall Street Journal
Just how strong is the U.S. consumer feeling?
Retail sales grew by an unexpectedly robust 1% last month, data showed Thursday. And Walmart reported solid earnings, lifting its stock in premarket trading. Meanwhile, weekly jobless claims came in slightly below consensus forecasts.
Investors bid up stock futures, and pushed down bond prices, as the new data points helped allay recent concerns about potential U.S. recession risk.
In Asia, the consumer is also a big theme. New reports showed retail sales picked up in China, while consumer spending helped lift quarterly growth in Japan.
American households boosted their retail spending last month, with strong vehicle sales helping to drive a higher-than-expected reading for last month.
Retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 1% in July from the month before, the Commerce Department said Thursday.
That was a strong pickup from June, when sales were revised down to a 0.2% decrease.
Economists surveyed by The Wall Street Journal had expected retail sales rose just 0.3% in July.
“The ongoing resilience of consumer spending should ease recession fears,” said economist Michael Pearce of Oxford Economics in a note to clients.
In July, shoppers increased their spending in nearly every category, with strong spending at car dealerships, grocery stores and on electronics.
Vehicle sales rose 3.6% in July, recovering from a drop in June when dealerships were hit by a cyberattack at software firm CDK Global, disrupting their ability to sell or repair cars.
Excluding vehicle sales, overall retail sales rose a more modest 0.4% last month.
Joseph LaVorgna, chief economist at SMBC Nikko Securities, said “you’re looking at a U.S. consumer that is still spending but is very downbeat,” according to measures of consumer sentiment.
A measure of online spending rose 0.2% in July, a month that saw Amazon’s Prime Day summer promotion. Spending at home-improvement stores rose 0.9%, likely reflecting the impact of Hurricane Beryl.
Retail sales aren't adjusted for inflation and reflect price differences as well as purchase amounts.
The retail-sales report mainly captures spending on goods rather than most services such as travel, housing and utilities, offering only a partial picture of spending. The Commerce Department will release its monthly report that includes more-complete spending figures later this month.
Consumer spending has remained relatively solid this year, despite a cooling labor market, rising at a 2.3% annual rate in the second quarter, according to the Commerce Department’s most recent report on gross domestic product.
The Labor Department said earlier this month that the unemployment rate rose to 4.3% in July, its highest level since 2021. Average hourly earnings were up 3.6% in July from a year earlier—above the recent pace of inflation, but the smallest gain since May 2021.
Just how strong is the U.S. consumer feeling?
Retail sales grew by an unexpectedly robust 1% last month, data showed Thursday. And Walmart reported solid earnings, lifting its stock in premarket trading. Meanwhile, weekly jobless claims came in slightly below consensus forecasts.
Investors bid up stock futures, and pushed down bond prices, as the new data points helped allay recent concerns about potential U.S. recession risk.
In Asia, the consumer is also a big theme. New reports showed retail sales picked up in China, while consumer spending helped lift quarterly growth in Japan.
American households boosted their retail spending last month, with strong vehicle sales helping to drive a higher-than-expected reading for last month.
Retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 1% in July from the month before, the Commerce Department said Thursday.
That was a strong pickup from June, when sales were revised down to a 0.2% decrease.
Economists surveyed by The Wall Street Journal had expected retail sales rose just 0.3% in July.
“The ongoing resilience of consumer spending should ease recession fears,” said economist Michael Pearce of Oxford Economics in a note to clients.
In July, shoppers increased their spending in nearly every category, with strong spending at car dealerships, grocery stores and on electronics.
Vehicle sales rose 3.6% in July, recovering from a drop in June when dealerships were hit by a cyberattack at software firm CDK Global, disrupting their ability to sell or repair cars.
Excluding vehicle sales, overall retail sales rose a more modest 0.4% last month.
Joseph LaVorgna, chief economist at SMBC Nikko Securities, said “you’re looking at a U.S. consumer that is still spending but is very downbeat,” according to measures of consumer sentiment.
A measure of online spending rose 0.2% in July, a month that saw Amazon’s Prime Day summer promotion. Spending at home-improvement stores rose 0.9%, likely reflecting the impact of Hurricane Beryl.
Retail sales aren't adjusted for inflation and reflect price differences as well as purchase amounts.
The retail-sales report mainly captures spending on goods rather than most services such as travel, housing and utilities, offering only a partial picture of spending. The Commerce Department will release its monthly report that includes more-complete spending figures later this month.
Consumer spending has remained relatively solid this year, despite a cooling labor market, rising at a 2.3% annual rate in the second quarter, according to the Commerce Department’s most recent report on gross domestic product.
The Labor Department said earlier this month that the unemployment rate rose to 4.3% in July, its highest level since 2021. Average hourly earnings were up 3.6% in July from a year earlier—above the recent pace of inflation, but the smallest gain since May 2021.
