The latest reading on the retail sector suggests that the U.S. consumer remains alive and well, and consumer spending likely accelerated in the second quarter.
The U.S. government reported on Monday that retail sales increased 0.5% in June, in line with economists’ forecasts, while May’s data was revised higher to 1.3% versus the previously reported 0.8%. May’s retail sales gain was the largest since September 2017.
Solid consumer spending bodes well for the U.S. economy, with consumer spending accounting for more than two-thirds of the country’s economic activity. As reported by Reuters, consumer spending slowed in the first quarter, to its slowest pace of growth in almost five years.
This latest data supports economists’ expectations that consumer spending accelerated in the second quarter. Last Friday, Federal Reserve Chairman Jerome Powell said, “over the first half of this year, overall economic activity appears to have expanded at a solid pace.”
Consumer spending is seen as a reflection of consumers’ attitudes about the state of the economy including their confidence in their employment.