US retail sales beat expectations in June

Dollar Tree Store in Pasadena, USA

WASHINGTON (Reuters) – U.S. retail sales rose more than expected in June as consumers paid higher prices for motor vehicles and other goods.

Retail sales rose 1.0% last month, the Commerce Department said Friday. May data was revised to show sales fell 0.1% instead of the 0.3% drop previously reported.

Economists polled by Reuters had forecast retail sales to rise 0.8%, with estimates ranging from a 0.2% drop to a 2.2% rise. Retail sales primarily include goods and are not adjusted for inflation.

US consumer prices rose 9.1% annually in June, the biggest increase since November 1981, putting the Federal Reserve on track to raise interest rates by 0.75 percentage points later this month. Since March, the US Federal Reserve has raised interest rates by 1.50 basis points.

Gasoline prices rose in June, averaging $5 a gallon, according to data from the American Automobile Association (AAA). But they were down from last month’s record high, averaging $4.577 a gallon on Friday.

Retail sales were also boosted by motor vehicle purchases, pressured by shortages.

Excluding automobiles, gasoline, construction materials and food services, retail sales rose 0.8% in June. May data was revised to show that sales fell 0.3%, unchanged from previously reported.

Core retail sales are more closely related to the consumption component of GDP.

(Reporting by Lucia Muthikani)