- Advance Retail Sales for July rose .3% versus estimates of a .2% gain and an upwardly revised -.7% decline in June.
- Retail Sales Less Autos for July rose .4% versus estimates of a .4% increase and an upwardly revised -.2% decline in June.
- Business Inventories for June rose .4% versus estimates of a .4% gain and a .5% increase in May.
BOTTOM LINE: US retail sales rose more than expected in July, a sign that consumer spending is accelerating into the important back-to-school selling season, Bloomberg reported. Moreover, excluding autos and gas station receipts, retail sales rose a healthy .6%. This data bear out the Fed’s forecast, reiterated last week, that the economy will grow at a “moderate” pace through year-end. Sales of electronics were especially strong, boosted by Apple’s(AAPL) iPhone release, rising 1%. Filling station sales fell .8% last month, as gas prices declined. Finally, furniture sales rose .5%. Wages in July rose 3.9%, well above recent inflation readings, which helped boost the Conference Board’s Consumer Confidence Index to a six-year high during July. I continue to believe retail sales will accelerate into the fall as energy prices continue to fall meaningfully, inflation decelerates further, wages continue to substantially outpace inflation, unemployment remains historically low, housing fears subside, stocks resume their major uptrend and confidence improves.
US businesses took advantage of slower sales in June to rebuild depleted inventories, suggesting orders and production will keep growing in coming months, Bloomberg said. Businesses had enough goods on hand to last 1.27 months at June’s sales pace, near the lowest in 12 months. I continue to believe inventory rebuilding will help boost US economic growth through year-end as companies gain confidence in the sustainability in the current expansion.
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