By Luis Cabrera
Retail Sales figures were better than analysts expected for July, the Department of Commerce said today. The gain of 0.8 percent last month for retailers follows a negative growth of 0.7 percent in June, and marks the biggest improvement since February.
According to a Bloomberg survey, economists had predicted a boon of only 0.3 percent in 13 monitored categories for retailers. July’s sales surpassed forecasts in all; the first time this happens since 2005.
Merchants Gap and TJX, owner of Marshalls and T.J. Maxx, reported improved sales. Macy’s and its sister company Bloomingdale’s also had positive figures for July. Experts say the added consumer spending indicates American households are looking beyond the
Hiring is slightly improving, but unemployment still hovers above 8 percent and the Federal Reserve estimates economic growth will remain “moderate” over coming quarters.
“The consumer hasn’t thrown the towel and that’s encouraging” says Millan Mulraine, Senior strategist at TD Securities Inc. in New York. “They’ve been bruised in the last month with very slow job growth, but we’re off to a good start in the third quarter.” Mulraine added that consumer spending will hold only if employment accelerates in the next months.
Some of the categories showing improvement in today’s report are used to calculate gross domestic product, and analysts at Morgan Stanley are predicting an overall growth of 1.9 percent for the third quarter. Economists at Goldman Sachs were more optimistic with
predictions above 2 percent for the same period.