Retail sales surge in July in a reassuring sign for the U.S. economy

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Americans spending more than enough to keep economy growing

Sales at U.S. retailers such as Amazon and Best Buy posted the biggest increase in July in four months, a sign Americans are still strong in the economy even as headwinds pick up.

Retail sales increased 0.7% last month, the government said Thursday. Economists polled by MarketWatch had forecast a 0.3% increase.

Sales rose an even stronger 0.9% if auto dealers and gasoline stations are neglected. Car and fuel purchases sometimes pull broader retail trends.It wasn’t just internet retailers, though. Sales also rose sharply at department stores, restaurants and electronics outlets.

A spike in oil prices boosted sales at gas stations by 1.8%, but price at the pump began to fade in August. Retail sales were strong even if gas stations are set aside. Sales fell at auto dealers and stores that sell music, books and sporting goods.

 The steady pace of consumer spending at local retail stores and Internet sites is a strong sign for a U.S. economy that’s facing increasing hurdles, particularly a septic trade dispute with China that’s sent Wall Street stocks flling. Economic growth has slowed around the world and that could also spell trouble at home.

The saving grace for the economy is a healthy labor market and low unemployment rate that’s given households enough confidence to spend at levels sufficient to keep the U.S. out of recession. Assuming, that is, the U.S. trade fight with China doesn’t get any worse.

“The U.S. consumer continues to boost up the economy, despite the building adversities to growth from trade disruptions and signs of weakness from other industrialized nations,” said senior economist Ben Ayers at Nationwide.             The Dow Jones Industrial Average DJIA, +0.39% and the S&P 500 index SPX, +0.25% rose slightly in Thursday trades, a day after the Dow lost 800 points. Stocks have been washed this month from an intensifying U.S. trade dispute with China that appears to have weakened the global economy.

The 10-year Treasury yield TMUBMUSD10Y, +1.20% slipped to 1.57%, a low number that reflects broader worries about the economy.


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Bradley Sterner

Retail businesses are of prime importance in this consumerist era. A commodity is now much more than just a product which is used and thrown, it is an important cog in the capital market machine, and the use patterns greatly affect the manufacturing and making trends! Bradley understands this quintessential topic, and writes to justify his causes.

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