U.S. retail sales grew 0.7% in July

Aug. 15 (UPI) -- Easing inflationary pressures in the U.S. economy supported consumer spending last month, with Tuesday's estimate on retail sales showing a 0.7% expansion from June.

The U.S. Census Bureau, part of the Commerce Department, reported that its advance estimate for retail and food sales in July reach $696.4 billion, a better-than-expected 0.7% increase from June.

Sales year-on-year were up 3.2% and the change from May to June was revised up a fraction of a percent to 0.3%.

Sales slipped for at-home furniture, with selling dropping 1.8% from June and 6.3% from July 2022. On the other end of the spectrum, sales increased by 1.5% from June and 1% from July 2022 for booksellers, sporting good stores and other hobby outlets.

Ed Moya, a senior market analyst at broker OANDA, described the report on retail sales as "robust," though it could be a mixed blessing.

"A healthy consumer was supposed to drive soft landing calls, but too much consumer resilience will drive the Fed to keep rates higher for longer," he said in response to emailed questions.

The U.S. Federal Reserve is working to slow inflation by way of aggressive rate hikes, though it's cautious not to put the broader economy into a tailspin that would lead to widespread layoffs or a recession.

Too much spending, supported by a healthy labor market, would only incentivize demand and push inflation higher.

Consumer-level inflation is down sharply from year-ago levels, though Moody's Investor Service recently put several banks on notice and warned of a mild recession for the U.S. economy. And while consumer spending showed an increase, so too did debt.

For the first time since it began keeping records, the Federal Reserve Bank of New York said last week that U.S. consumers are carrying a collective $1 trillion in credit card debt.