Our economy continues to grow. Excellent jobs reports mean there’s a lot more expendable income.
Stimulating the economy is best accomplished not through government intervention, but by putting money back into the market, which is exactly what we’re seeing.
Consumer spending rose by 0.5% in June and the Commerce Department revised May’s spending report, upgrading spending increases from 0.8% to 1.3%.
Overall, retail sales are up 6.6% from a year ago.
From The Wall Street Journal:
Retail sales—a measure of spending at U.S. stores, websites and restaurants—rose 0.5% in June from the prior month, the Commerce Department said Monday. May’s already strong spending growth was revised up to a robust 1.3% from 0.8%.Many economists estimate the nation’s gross domestic product—a measure of output—expanded robustly in the second quarter. Ahead of Monday’s report, forecasting firm Macroeconomic Advisers projected growth had hit a 4.9% rate. After the report was released, the firm upped its forecast to 5.1%.
Vehicle purchases and higher gas prices are the main drivers behind the economic uptick.
Spending was up considerably “at health and personal-care stores” who saw the largest increase in monthly sales in 14 years.
Brick and mortar Department stores are lagging as consumers continue to frequent online stores. Clothing sales dropped by 2.5%, the biggest drop since February 2017, while online sales jumped 1.3%, the biggest rise since November 2017.
From CNBC:
Given the upward revision to May data, the unchanged reading in core retail sales last month likely does not change views that consumer spending accelerated in the second quarter. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked sharply in the January-March period, growing at its slowest pace in nearly five years.In addition to the solid retail sales data, a sharp narrowing of the trade deficit in April and May has also bolstered expectations of a strong GDP reading in the second quarter. The government will publish its snapshot of second-quarter GDP later this month.Consumer spending is being driven by a tightening labor market, which is steadily pushing up wages. Consumption is also being supported by tax cuts and savings.
All of this data has led economists to predict “that growth will jump to a 4 percent to 4.5 percent annual rate in the April-June quarter.” If that happens, that will “be the strongest in four years.”
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