The Commerce Department reported on Friday that June retail sales were higher than expected, rising 1%, reversing the decline from the previous month.
The June rise was revised upward from a 0.3% decline, following a 0.1% decline in May. This decline has surprised economists who were tracking whether consumers were feeling a pinch of inflation and rising interest rates when first reported, reducing spending.
The surge in many categories reflects consumers paying more for the same amount of goods and services, as retail sales data have not adjusted for price increases.Gas station spending increased 3.6% In June, because Americans felt a lot of pain in the pump. Excluding gas, June retail sales were up 0.7%, also above economists’ expectations.
The Federal Reserve Board has been raising interest rates since March in hopes of slowing consumer and corporate demand and slowing rapid inflation.
Central bank officials have admitted that they are concerned about a report released Wednesday showing that the consumer price index has skyrocketed 9.1% in the year to June. However, some have emphasized that they do not want to react too much to one data point, and so far support a three-quarter point hike at the central bank’s July 26-27 meeting. Suggests. Move to June.
Still, at least three suggest that inputting data on consumer spending and other measurements on housing and inflation expectations could influence thinking about whether even more significant rate hikes are needed. increase.
The Federal Reserve may see June retail sales as a sign that US consumers continue to spend despite high interest rates and high prices. This allows you to focus on increasing the rate for larger, complete percentage points. However, the numbers indicate continued solid spending rather than a sharp surge, which may not be a decisive factor for policy makers.