Americans bought more cars, restaurant meals and building supplies in July, a rise in spending that points to steady economic growth anchored by an improving job market. Retail sales climbed 0.6% last month after a flat reading in June, the Commerce Department announced this morning.
The Associated Press reports July’s increase suggests that the combination of solid hiring and cheaper gasoline is contributing to rising consumer confidence and spending after a muted start to 2015. Greater retail sales could help boost overall economic growth because consumer spending accounts for the bulk of U.S. economic activity.
“This report looks solid after a run of disappointing numbers,” says Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Purchases at auto dealers rose 1.4% last month, while restaurants and building materials stores both recorded a 0.7% gain. Shopping also improved at furniture stores, sporting goods retailers and clothiers.
Even gasoline station sales increased in July, although lower prices at the pump have generated a 15.2% drop in sales over the past year. Not all sectors improved last month. Sales waned at electronics and department stores, while spending at grocers was flat.
