Retail sales rebound in July

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- After two months of declines, retail sales rebounded in July, the government said Friday.

Total retail sales rose 0.4% to $362.7 billion, compared with June's 0.3% decrease, the Commerce Department said. The June drop was revised from the originally reported 0.5%.

The overall sales percentage gain was slightly lower than anticipated. Economists surveyed by Briefing.com had expected sales would rise by 0.5% during the month.

Consumer spending accounts for two-thirds of U.S. economic activity, so retail sales and related reports are closely monitored to gauge the health of the economy.

Sales excluding autos and auto parts rose 0.2% last month, in line with economists' forecasts. In June, sales on the same basis were down 0.1%.

Motor vehicle and parts sales also rose 1.6% in the month, and gasoline store sales rose 2.3%.

As the recovery tugs along at a slower pace than most analysts had originally expected, consumers are still cautious about their spending. But July also marked the start of back-to-school shopping season, which often means a boost in sales.

"Back-to-school has accelerated into the July timeframe and we certainly know that parents are expecting to spend more than they did last year. The July numbers would indicate that that's going to be playing out through August as well," said Janet Hoffman, managing director of consultant firm Accenture's retail practice.

Overall, retail sales are up 5.5% over July last year, the government report said.

But the year-over-year comparison is not necessarily something to "jump for joy over," as retailers come off some deep hits last year during the downturn, said Doug Hart, a partner in the consumer product division of business services firm BDO.

On a month-to-month basis, sales are still showing relatively flat to modest gains in line with a slow recovery, he said.

"Consumers are still looking for value. They're still cautious," Hart said.

Analysts also often look to back-to-school season to forecast how retailers will fare during their most profitable season - the winter holidays.

Hoffman said she doesn't expect a "shocking uptick" in retail sales during the holidays, but is forecasting sales growth for that period. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,080.14 21.45 0.12%
Nasdaq 5,092.09 36.03 0.71%
S&P 500 2,117.69 4.76 0.23%
Treasuries 1.92 -0.03 -1.54%
Data as of 10:06pm ET
Company Price Change % Change
Microsoft Corp 47.87 4.53 10.45%
Apple Inc 130.28 0.61 0.47%
Comcast Corp 59.64 0.41 0.69%
AT&T Inc 34.01 -0.22 -0.64%
Xerox Corp 11.99 -1.15 -8.75%
Data as of 4:08pm ET
Sponsors

Sections

Shares in Italian bank Intesa Sanpaolo dropped sharply Friday after hoaxers claimed its CEO had quit after faking billions in profits. More

The impact of rising immigration on Britain's economy has become a hot topic in the election campaign. More

Apple is likely to post huge growth in sales and profits thanks to the popularity of the iPhone 6. Here's all the numbers to keep an eye on in the report. More

A Girl Scouts Cookie Oven rolling out to Wal-Mart, Target, Kmart stores this summer will let you bake those iconic thin mints right at home. More