This key measure of the US economy held surprisingly steady
US retail spending has been mostly flat since the beginning of the year, holding steady in June. Consumer spending powers two-thirds of the US economy, with retail sales making up a significant portion.
June’s reading was better than expected, with economists projecting a decline. Gas station sales saw the most significant drop, while online sales and home improvement store sales remained strong.
Despite concerns about inflation, interest rates, and limited job opportunities, consumers are not retrenching, according to economists.
Companies such as Helen of Troy and PepsiCo have reported weak earnings due to consumers prioritizing essentials and being more value-conscious.
The latest retail spending figures, coupled with inflation moderation, may lead the Federal Reserve to consider cutting interest rates in the coming months.
Wall Street traders predict the first rate cut may occur in September, but additional economic data will be crucial in determining the timing.