WASHINGTON – Retail sales showed a broad-based gain in June, which probably helped the U.S. economy rebound in the second quarter.
Purchases increased 0.2 percent after a 0.5 percent advance in May that was larger than previously reported, Commerce Department figures showed Tuesday in Washington. The reading fell short of the 0.6 percent increase projected by the median estimate of 83 economists surveyed by Bloomberg, restrained by a drop among auto dealers. Demand climbed in nine of 13 major categories last month.
Consumers are more comfortable opening their wallets as a strengthening labor market lifts earnings. Higher wages give American households the wherewithal to withstand recent increases in food and gasoline costs that had chipped away at buying power.
“We’re quite likely to see a pickup in consumer spending in the second half of the year from the stronger jobs numbers,” David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, said before the report. “The strong job numbers mean there’s an increase in wages in the aggregate and a lot of it’s going to get spent.”
Estimates in the Bloomberg survey ranged from gains to 0.2 percent to 1.1 percent. May’s reading was revised from an initially reported 0.3 percent increase.
Clothing stores, general merchandise merchants and non-store retailers, which include online vendors, were among the major retail categories showing gains last month, Tuesday’s report showed.
Further healing in the labor market is giving households the wherewithal to spend. Employers added 288,000 jobs in June, lifting the average monthly advance so far in 2014 to almost 231,000. If that pace is sustained, job gains this year would be the best since 1999. The jobless rate dropped last month to an almost six-year low of 6.1 percent.