Retail sales in the United States rose more than expected in July, which may ease financial market concerns about a sharp economic slowdown triggered by rising unemployment.
Retail sales rose 1.0% last month after a downwardly revised 0.2% decline in June, the Commerce Department's Census Bureau said on Thursday.
Economists polled by Reuters had forecast retail sales, which are made up mostly of goods and are not adjusted for inflation, rose by 0.3% after previously being reported unchanged.
Signs that demand has not weakened sharply could prompt financial markets to reduce expectations of a 50 basis point interest rate cut next month. The odds still favor a quarter-point rate cut, with inflation rising modestly in July.
Consumers continue to spend by hunting for bargains and switching to cheaper substitutes.
Retail sales that exclude automotive, gasoline, building materials, and food services rose 0.3% last month after an unrevised increase of 0.9% in June.
These so-called core retail sales most closely reflect the consumer spending component of gross domestic product (GDP). These strong data put retail sales on a strong footing at the start of the third quarter, despite a marginal increase last month.
