US July Retail Sales Increase 0.7%... Exceed Expectations, Raising 'Soft Landing' Hopes

U.S. retail sales in July exceeded market expectations. It is assessed that a strong labor market continues to drive consumer spending.

According to the U.S. Department of Commerce on the 15th (local time), retail sales in July increased by 0.7% compared to the previous month, marking the fourth consecutive month of growth. This is the largest increase in the past six months and significantly surpasses the expert forecast of a 0.4% increase compiled by The Wall Street Journal (WSJ). Core retail sales, excluding automobiles, rose by 1.0% compared to the previous month.

Specifically, sales increased in 9 out of 13 categories, including clothing, sporting goods, restaurants, and bars. Sales at non-store retailers, including online shopping boosted by the Amazon Prime Day effect, increased by 1.9%. Sales of sporting goods and related items also rose by 1.5%.

Retail sales are a pillar accounting for two-thirds of the U.S. real economy and are considered a comprehensive indicator of economic health. This indicator was released amid growing expectations of a so-called "soft landing," as recent inflation indicators such as the Consumer Price Index (CPI) have shown a clear easing trend. Lindsey Piegza, Chief Economist at Stifel Financial, commented on the data, saying, "Thanks to consumer resilience, this will strengthen optimism that a soft landing is possible," while also noting, "At the same time, this means the Fed will need to maintain high interest rates for longer."

Bloomberg News stated, "The strong labor market combined with wage growth shows that many Americans have the capacity to consume," adding, "Despite high interest rates and the possibility of a recession, consumption is supporting the U.S. economy." However, the outlet also noted that rising delinquency rates, high debt repayment costs, and the depletion of excess savings accumulated during the pandemic could pose threats to future consumer spending power.

This content was produced with the assistance of AI translation services.