Retail Sales Growth Eases In June, But Still Signals Healthy Demand Conditions

Consumer spending remained resilient in June, but advanced at a lower-than-expected pace, suggesting healthy demand conditions in the economy.

“Retail sales experienced a 0.2% month-over-month increase in June, missing the 0.5% rise forecasted and following an upwardly revised 0.5% increase in May,” said the preliminary estimates released by U.S. Census Bureau on Tuesday.

“The core retail sales gauge, which exclude automobiles, gasoline, building materials and food services, rose 0.3% month-over-month in June, beating expectations of a flat reading but slowing from an upwardly revised 0.5% gain in May,” said Benzinga. 

June Retail Sales: What You Need To Know
 

• The 0.2% monthly increase in retail sales was lower than the 0.5% gain predicted by economists.The 1.5% yearly increase in retail sales was also somewhat lower than the 1.6% expected.
   
• Retail sales increased for the third month in a row, after climbing 0.4% in April and 0.5% in May. The April 2023 to May 2023 change was revised from 0.3% to 0.5%. 
   
• Core retail sales, excluding motor vehicles and parts, saw a 0.2% increase on a monthly basis, slowing from the 0.3% rise in May and missing expectations of a 0.3% increase. On an annual basis, core retail sales showed 0.6% growth.
   
• When excluding gasoline stations as well, core retail sales experienced a 0.3% monthly increase in June, slightly lower than the revised 0.5% recorded in May but surpassing expectations of zero. On a year-over-year basis, core retail sales excluding autos and gas were 3.9% higher. 
   
• Among various spending categories, the largest monthly increases were seen in miscellaneous store retailers, with a 2% rise, and nonstore retailers, with a 1.9% increase.
   

Market Reactions: Dollar Ticks Higher

• The U.S. Dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF, ticked 0.2% higher in the minutes after the release.
   
• A further rate hike by the Fed following the July meeting is estimated at 12% probability in September and 22% probability by November.
   
• Futures on the S&P 500 index, which is closely tracked by the SPDR S&P 500 ETF Trust ticked 0.1% down. 
   
• Treasury yields were flat, with the 10-year note trading at 3.78% yield and the two-year at 4.74% yield.
   

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Produced in association with Benzinga

Edited by Judy J. Rotich and Newsdesk Manager