RTTNews - Retail sales increased by a little more than expected in the month of June, according to a report released by the Commerce Department on Tuesday, with the sales growth due in large part to increased sales by gas stations.
The report showed that retail sales rose 0.6 percent in June following an unrevised 0.5 percent increase in May. Economists had been expecting retail sales to increase by a somewhat more modest 0.4 percent.
A jump in gas station sales contributed to the stronger than expected retail sales growth, with sales by gas stations increasing by 5.0 percent for the second consecutive month. The sales growth was mostly due to higher gasoline prices.
According to the Energy Department, gasoline prices averaged $2.68 per gallon in
June, up from $2.32 in May.
Excluding the increase in sales by gas stations, retail sales increased by a more modest 0.3 percent in June compared to a 0.1 percent increase in May.
The stronger than expected retail sales growth also reflected a significant increase in sales by motor vehicle and parts dealers, which jumped 2.3 percent in June after increasing by 0.7 percent in the previous month.
Without the increase in motor vehicle and parts sales, retail sales rose 0.3 percent in June compared to a 0.4 percent increase in May. The increase in ex-auto sales came in below economist estimates of 0.5 percent growth.
Retail sales actually fell 0.2 percent excluding both the increases in gas station and motor vehicle and parts sale.
While sales by electronics and appliance stories showed a notable 0.9 percent increase in June, the growth was offset by lower sales at building materials and supplies stories as well as food services and drinking places.
Peter Boockvar, equity strategist at Miller Tabak said, Bottom line, retail sales remain sluggish due to the obvious reasons.
Last Friday, a report released by Reuters and the University of Michigan showed that consumer sentiment in the month of July has deteriorated by much more than anticipated, with the decrease due in part to concerns about the labor market.
The report showed that the preliminary reading on the consumer sentiment index for July came in at 64.6 compared the final reading of 70.8 for June. Economists had been expecting a more modest decrease to a reading of about 70.0.
Commenting on the data, the Reuters/University of Michigan Surveys of Consumers said, Consumers concluded that the economic downturn would last longer and their personal finances would not recover as quickly as they had previously expected.
A considerable deterioration in expectations contributed to the steep drop by the index, with the expectations index falling to 60.9 in July from 69.2 in June.
Consumers also had a weaker assessment of current conditions, as the current conditions index fell to 70.4 in July from 73.2 in the previous month.
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