US Retail Sales Surge In Broad Advance, Topping Estimates

US retail sales rebounded in June in a broad advance, potentially tempering some concerns about a retrenchment in consumer spending.

The value of retail purchases, not adjusted for inflation, increased 0.6% after declines in the prior two months, Commerce Department data showed Thursday. That exceeded nearly all estimates in a Bloomberg survey of economists. Excluding cars, sales climbed 0.5%.

Ten out of 13 categories posted increases, surprisingly fueled by motor vehicle sales, which climbed after back-to-back declines. Administrative data showed car sales fell in June and prices for new and used vehicles were down in the latest inflation data, defying economists’ expectations for autos to weigh on the headline retail figure.

Thursday’s report offers some relief amid mounting anxiety around the health of the consumer. Americans have been largely pessimistic on the economy and their finances this year as tariffs threaten to worsen a years-long cost-of-living crunch, though sentiment has rebounded somewhat recently.

“There’s still a lot of trepidation about tariffs and likely price hikes, but consumers are willing to buy if they feel they can get a good deal,” Heather Long, chief economist at the Navy Federal Credit Union, said in a note. “The word of the summer for the economy is resilient.”

The better vibes have coincided with some dialing back of President Donald Trump’s tariffs, but in the last week, he’s ratcheted up threats again on key trading partners and goods that are slated to take effect next month. At the same time, prices of products more exposed to the duties like toys and appliances rose notably in the latest inflation data, suggesting import costs are getting passed through to consumers.

For Federal Reserve officials, it’s still an open question as to whether tariffs will cause a one-time hit to prices or prove more persistent. Policymakers have kept interest rates steady in the meantime and are expected to do so again when they meet later this month.

The retail sales report showed so-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — rose 0.5%, rounding out the first half of the year on a strong note. The measure excludes food services, auto dealers, building materials stores and gasoline stations.

The retail sales figures largely reflect purchases of goods, which comprise roughly a third of overall consumer outlays. Inflation-adjusted spending data on goods and services for June will be released later this month.

Spending at restaurants and bars, the only service-sector category in the retail report, advanced 0.6%.

Because Thursday’s figures aren’t adjusted for inflation, a decline could reflect less spending activity or simply lower prices. Similarly, an increase could indicate higher prices rather than more sales volume.

A separate report out Thursday showed import prices barely rose in June after declining a month earlier. Meantime, applications for unemployment benefits fell for a fifth week to the lowest level since mid-April, indicating companies are largely retaining workers.