June retail sales rise at a healthy 0.5 percent pace

SHARE June retail sales rise at a healthy 0.5 percent pace
ap18186755932385_e1531745118662.jpg

The Commerce Department said Monday that sales at retailers and restaurants increased 0.5 percent in June. | AP file photo

WASHINGTON — U.S. retail sales rose at a solid pace last month despite higher prices and modest wage gains, a sign of underlying consumer optimism.

The Commerce Department said Monday that sales at retailers and restaurants increased 0.5 percent in June, following a big 1.3 percent gain the previous month. May’s figure was revised sharply higher from an initial estimate of 0.8 percent.

Americans are confident about the economic outlook, with the unemployment rate near an 18 year-low and the economy accelerating after a sluggish start to the year. Retail sales rose 6.6 percent from a year earlier, the fastest annual pace in five years.

Still, some of the spending increases, such as gas station sales, simply reflect higher prices. Excluding auto dealers and gas stations, sales rose 0.3 percent in June.

Home and garden stores reported a strong 0.8 percent sales gain, which was likely lifted in part by more expensive lumber. The Trump administration imposed tariffs on some lumber imports from Canada last fall.

With consumer spending strong, most economists believe that growth will jump to a 4 percent to 4.5 percent annual rate in the April-June quarter, which would be the strongest in four years. That would follow just 2 percent growth in the first three months of the year.

A survey of business economists found that most companies expect their sales to rise in the coming months and that they plan to raise pay to attract and keep workers. The proportion of businesses planning to raise pay was the largest in roughly 35 years.

Still, most of the respondents to a survey by the National Association for Business Economics said that the Trump administration’s corporate tax cuts last year have yet to affect their plans for hiring and investment. The administration has sold the tax cuts as an incentive for companies to invest more in plant and equipment.

Nearly two-thirds of companies in the NABE survey said that the administration’s trade policies hadn’t changed their hiring or investment plans.

There are some threats on the horizon. Rising prices for gas, cars, and medical care have boosted inflation in the past year to a six-year high. That has offset modest wage gains, leaving workers with flat pay in the past 12 months after adjusting for price changes.

The erosion of purchasing power could worsen if President Trump follows through on a threat to impose tariffs on $200 billion of Chinese imports, including consumer items such as hats, handbags, and furniture. Those duties would follow tariffs on $34 billion of Chinese imports earlier this month, as well as import taxes on steel and aluminum from Europe, Canada, China and other countries.

But a quarter of farmers, manufacturers, and construction companies surveyed said they had delayed making new investments because of the tariffs and retaliatory measures by China, Europe and other trading partners.

The Latest
One person was killed and three others wounded in a shooting Monday in the 7100 block of South State Street, police said. The gunman was wounded and taken into custody.
Last week, several people made antisemitic comments during the public comments portion of a City Council meeting. The speakers are affiliated with the Goyim Defense League, which the Anti-Defamation League calls a white supremacist hate group.
Whereas the Rams (27-7) looked a step slow and overwhelmed, the Broncos (29-7) were ferocious and took Monday’s 44-25 Class 3A super-sectionals game against the Rams to advance to the Illinois state semifinals in Bloomington-Normal.
We citizens shouldn’t fall prey to our teams’ brazen financial requests
The girl was taken to Comer Children’s Hospital in serious condition after she was struck Monday afternoon.