US Economy: Retail Spending Surged In July Despite Still-High Inflation

Recent reports have shown that the backbone of America’s economy remains solid, despite a slowing job market, elevated interest rates and still-high inflation.

Sales at US retailers unexpectedly surged in July, the Commerce Department said on Thursday. This marks an increase by a solid 1% from the prior month, up from June’s downwardly revised 0.2% decline. That trounced economists’ expectations of a 0.3% gain.

According to the CNN, retail sales, which are adjusted for seasonal swings but not inflation, make up a sizable chunk of overall spending. July’s reading is a boon for the US economy because the country’s economic growth hinges on Americans spending their dollars.

It is the economy’s latest show of strength in the face of several economic hurdles squeezing the US consumer.

Sales jumped across most categories last month, rising the most at car dealerships, which likely reflects a rebound from the cyberattack on software systems that dealerships use earlier this summer. Those sales spiked by 3.6% in July. Excluding that category, retail sales were up by a still-strong 0.4% in July from June.

Retail spending on electronics and at grocery stores also rose robustly last month, up by 1.6% and 1%, respectively. Americans also continued to spend at bars and restaurants at a healthy pace. Meanwhile, sales were down at specialty stores and clothing retailers in July.