The public seems to be back in a spending mood, at least according to data released this morning by the Commerce Department. Specifically, that agency reported that Americans lifted their spending by a healthy 0.6% last month. That was two-tenths of a percentage point better than the consensus forecast, and notably improved from the unrevised estimated increase of 0.1% tallied in April.
All told, this was the third month in the past four that this key metric has risen. Over the past year, such spending was up by a solid 4.3%, suggesting that leveraged balance sheets, or not, consumers are still in there pitching.
Meanwhile, the big factor in this advance was autos, as such vehicles continued to be gobbled up at a hectic pace. To wit, sales of motor vehicles and parts jumped by 1.8%, while sales of autos and other vehicles surged by 1.9%. Taking out the auto-related component, to get the so-called core rate of retail sales, we find that this metric gained an in-line 0.3%.
Most other retailing categories did well, including building and garden equipment, which jumped by 0.9% last month, reflecting the healthy gains in the housing sector. Also doing well last month were sales at food, beverage, grocery, and health and personal care outlets. Sports and hobby stores sales and general merchandisers also acquitted themselves quite well. Nice gains likewise were posted by sales over the Internet.
Conversely, sales faltered somewhat at furniture, appliance and electronics outlets, which was rather surprising given the generally strong housing market across the country.
Overall, this was a solid report, with the reasonably decent report on core retail sales offering some hope that consumer spending will not slow too much in the current quarter, even if the aggregate gain in GDP this period is held to 1%-2%.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.