U.S. retail sales surprise to the upside

Americans spent more last month on clothing, electronics and dining out as the economy opened up and pandemic-related restrictions were lifted.

Retail sales rose a seasonal adjusted 0.6% in June from the month before, the U.S. Commerce Department said Friday. The increase was a surprise to Wall Street analysts, who had expected sales to fall slightly last month.

Spending has slowed since March, when stimulus checks sent to most Americans caused a surge in shopping. And as Americans get vaccinated, they are spending less on goods and more on hotels, haircuts and other services, which are not reflected in Friday’s report.

Last month’s increase could be due to higher prices, said Paul Ashworth, chief U.S. economist for consulting firm Capital Economics.

Americans are paying more for food, gas and other goods, with prices jumping last month by the most in 13 years.

The Commerce Department said Friday that sales at bars and restaurants rose 2.3%. Clothing store sales rose by 2.6%, and sales at electronic shops were up 3.3%.

At auto dealerships, sales fell 2%. Automakers aren’t making as many vehicles, meaning there are fewer cars to buy, due to a worldwide shortage of chips, which are needed to power in-car screens and other technology. When auto sales are stripped from Friday’s number, retail sales are up 1.3%.

The biggest drop in sales were at furniture stores, where they fell 3.6% in June. Sales also fell at home improvement stores and places that sell sporting goods.

Joseph Pisani, The Associated Press

Jospeh Pisani is a reporter with The Associated Press,  an American not-for-profit news agency headquartered in New York City and founded in 1846.