In July, U.S. retail sales increased by a bigger than expected amount, indicating resilience in consumer spending activity before the next Federal Reserve meeting.
On Thursday Commerce Department data showed retail sales rose by 1% in July, accelerating from June’s unchanged reading.
Economists had expected that retail sales, which are not adjusted for inflation and mostly reflect goods, would increase by 0.4%.
Retail sales rose by 2.7% on an annual basis, after in June increasing by a revised lower 2.0%.
This data may affect the outlook for the wider economy, as consumption is responsible for about 66% of U.S. economic growth, which may influence how the Federal Reserve sees interest rate reductions this year.
Last week the number of Americans filing initial applications for unemployment benefits dropped, fueling worries that the gradual easing of the labor market remains intact.
According to the Labor Department, first-time claims for state unemployment benefits fell by 7K to a seasonally adjusted 227K for the week that ended on August 10, compared with the expected increase to 236K.
Last week had seen the biggest drop in first-time claims in around 11 months, a revised decline of between 16K and 234K, which had been a welcome reversal after the prior week’s unexpected sharp rise in jobless claims.
