U.S. retail sales and consumer prices rose in July in a hopeful sign for the economy. Retail sales rose, but the gains were concentrated in auto and gasoline station sales, suggesting underlying momentum in consumer spending remains tame. Sales climbed 0.4% last month following a revised 0.3% drop in June, the Commerce Department said on Friday. Economists polled by Reuters had been looking for a slightly firmer 0.5% gain.
Excluding vehicles, sales advanced just 0.2% compared with a median forecast of 0.3%. Gasoline station receipts, which sometimes reflect price rises rather than increased demand, jumped 2.3%. When autos and gasoline were stripped out, sales actually fell 0.1%.
After emerging from its longest slump since the Great Depression, the U.S. economy has slowed in recent months, raising fears of a "double-dip'' recession. Retail sales are a key component of growth for a country where consumer spending makes up about two-thirds of total economic activity.
US Consumer Prices Rise 0.3% in July
Higher energy costs helped lift U.S. consumer prices in July, the first rise in four months, according to a government report on Friday that could ease concerns about deflation. The Labor Department said its seasonally adjusted Consumer Price Index rose 0.3% last month, after falling 0.1% in June. Analysts polled by Reuters had forecast consumer prices to rise 0.2%.
In the 12 months to July, the consumer price index rose 1.2%, in line with market expectations, after rising 1.1% in June, the report showed.