U.S. retail sales grew more than expected in June

U.S. retail sales rose 0.6% in June from May, the Commerce Department reported Friday morning, beating expectations of a 0.4% decline.

Why it matters: Retail’s overall recovery has been uneven, driven in part by stimulus checks, reopening patterns and seasonal demand changes.

The same can be said for the underlying sales categories, where clothing and personal care products continued to experience sales growth while furnishings and building materials sales growth continued to trend down.

By the numbers: The pace of retail sales, excluding autos, last month rose 1.3%, also faster than expectations of a 0.4% improvement, and marks a notable pickup from May, which showed sales declining 0.9%.

The latest metrics come on the heels of new inflation figures released earlier this week that showed consumer prices rising faster than expected last month, due mostly to car prices.

Categories with some of the fastest growth last month include clothing store sales (up 2.6%) and restaurants and bars (up 2.3%).

Home furnishing store sales continued to decline (down 3.6%) while cars and car parts dropped (down 2%), as supply chain issues continue to plague the sectors.

What they’re saying: The gains in clothing and electronics sales may reflect that stimulus checks and recent pace of inflation are pushing up sales, Capital Economics’ Paul Ashworth notes.

And with “food services sales values now back above the pre-pandemic level, we shouldn’t expect any dramatic gains from here,” Ashworth adds.

What to watch: For many retailers, the second quarter might be the end of a one-year period of above average consumer spending, a recent report from FTI Consulting found.

Editor’s note: This story has been updated with additional details.

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