US retail sales boosted by gasoline, automobiles in June

US retail sales rebounded strongly in June as Americans spent more on gasoline and other goods amid soaring inflation, which could allay fears of an imminent recession but not change the view that economic growth in the second quarter was tepid, Reuters reports.

Retail sales rose 1.0% last month, the Commerce Department said on Friday. Data for May was revised up to show sales falling 0.1% instead of 0.3% as previously reported.

Economists polled by Reuters had forecast retail sales would increase 0.8%, with estimates ranging from as low as a 0.2% drop to as high as a 2.2% increase. Retail sales are mostly made up of goods, and are not adjusted for inflation.

“Padded by high savings and rising wages, American households are spending nearly as much money as they did earlier, but largely to keep up with higher prices, not to actually buy more stuff,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “That said, today’s report may cool talk of a near-term recession.”

Annual consumer prices shot up 9.1% in June, the largest increase since November 1981, putting the Federal Reserve on track to deliver another 75-basis-point interest rate increase at the end of this month. The U.S. central bank has hiked its policy rate by 150 basis points since March.

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