Latest News

Economic Report: U.S. retail sales jump 1% in June, but high inflation is a big reason why

0

The numbers: Sales at U.S. retailers rose a solid 1% in June, but some of the increase was tied to higher prices of gasoline and food. Sales likely fell if inflation is taken into account, pointing to some softening in the economy.

Economists polled by The Wall Street Journal had forecast a 0.9% increase in retail sales last month.

Retail sales are a big part of consumer spending and offer clues on the strength of the U.S. economy.

Americans bought more new cars in June, but they also paid more to fill up at the gas pump and put dinner on the table because of higher food and energy prices. They cut back on other discretionary items such as clothes to try to even their expenses out.

After adjusting for a 1.3% increase in inflation inJune, real retail sales appear to have fallen slightly last month.

Big picture: Retailers are already witnessing the effects of high inflation as customers become more selective in what they buy.

The pullback is not limited to retail.

The broader U.S. economy appears to have slowed as the Federal Reserve moves to sharply raise interest rates. Higher rates tend to slow growth by discouraging consumers and businesses from spending or investing as much.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.46%

and S&P 500
SPX,
-0.30%

were set to open higher in Friday trades.

Coronavirus Update: 25 million children at risk of getting dangerous but preventable illnesses amid steep backslide in vaccinations

Previous article

: A 10% increase in the Social Security COLA? Inflation will push your Social Security check even higher for 2023

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News