US Retail Sales Beat Expectations in June

U.S. retail sales rebounded more than expected in June, but some of the increase likely reflected higher prices for some goods exposed to tariffs.

Retail sales increased 0.6% last month after an unrevised 0.9% drop in May, the Commerce Department's Census Bureau said on Thursday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, edging up 0.1%.

Part of the rise in retail sales last month could be due to tariff-driven price increases rather than volumes. Inflation data this week showed solid increases in June in the prices of tariff-sensitive goods like household furnishings and supplies, appliances, sporting goods and toys.

Retail sales excluding automobiles, gasoline, building materials and food services increased 0.5% last month after a downwardly revised 0.2% in May. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4% in May.

"All told, the household sector still appears to be holding up, but a moderation in consumer spending appears under way," said Sam Bullard, a senior economist at Wells Fargo.