US sales jump 0.7 per cent in July

WASHINGTON — American consumers spent far more than expected in July, as retail sales jumped on strong online purchases, according to government data released on Thursday.

Retail sales rose 0.7 per cent compared to June, to $523.5 billion, as ecommerce produced the biggest gain: a 2.8 per cent surge for non-store retailers, the Commerce Department reported.

Gasoline and food services posted big gains as well, but auto sales declined in the month, according to the data.

Total retail sales are up 3.4 per cent compared to July 2018.

The report gave a reassuring picture of the US consumer, a bedrock that has enabled the US economy to outperform other leading economies even as American manufacturing has weakened. 

Sectors with higher sales included clothing (+0.8 per cent), electronics and appliances (+0.9 per cent) and furniture (+0.3 per cent), while sporting goods saw a 1.1 per cent decline.

The report came on the heels of Dow's worst session of the year when a closely-watched bond market benchmark raised recession risks.

But the data shows the consumer "remains in very good shape", said Ian Shepherdson, chief economist at Pantheon Macroeconomics. 

"Gains at this pace can't be sustained... but we see zero evidence that the consumer is being dragged down by the troubles in manufacturing," he added.