US retail sales volumes in July point to solid consumption

Retail sales in the US rose a tad more strongly than expected in July, boosted by sales at department stores and for clothing.

Total US retail sales volumes jumped by 0.5% month-on-month in July to reach $507.53bn, according to the Department of Commerce.

That was much better than the 0.1% rise that economists had penciled-in, but was offset by a downwards revision of three tenths of a percentage point to June's reading, which was marked down to 0.2%.

Excluding automobile and gasoline station sales, volumes were up by 0.6% against June.

If just automobile sales are stripped out, then sales volumes rose by 0.6% month-on-month (consensus: 0.4%), although June's reading was revised down by two-tenths of a percentage point to 0.2%.

Versus June, the strongest readings were seen in sales of clothing and clothing accessories, which grew by 1.3%, together with a 1.2% jump in sales at merchandise stores.

Sales at food services and drinking places were also strong, increasing by 1.3%.

Meanwhile, automobile and gasoline station sales were up by 0.2% and 0.8%, respectively.

Versus a year ago, total retail sales were 6.4% stronger.

Commenting on Wednesday's retail data, Ian Shepherdson at Pantheon Macroeconomics said: "Strong department store and clothing sales boosted the control numbers, which have accelerated since the tax cuts. We see no reason to expect any incremental acceleration, but these numbers mean that a decent increase in total real consumption in July is a good bet."

Shepherdson also expressed surprise at the 0.2% rise in the dollar value of auto sales, explaining that it was at odds with the monthly sales figures reported by the country's major manufacturers.

Strong food service sales meanwhile rose strongly for a third successive month, pushing the annualised rate to an "unsustainable" 25.3%.