WASHINGTON — A strong uptick in retail sales in June signaling a rebound in the economy was buoyed by sales at department stores and general merchandise stores, the Commerce Department’s monthly report showed Friday.
Sales at general merchandise stores, a category that includes department stores and discounters, rose a seasonally adjusted 0.4 percent to $56.1 billion, while department store sales increased 0.7 percent to $13.2 billion last month. Apparel and accessories stores showed weakness, with a 1 percent drop in sales to $21.1 billion.
In the overall economy, retail sales rose 0.6 percent to $457 billion, ahead of economists’ expectations.
Economists said the retail sales report reflects stronger consumer spending and bodes well for the back-to-school season.
“June’s retail sales grew at a solid pace on the heels of a strong showing for both May and April,” said Jack Kleinhenz, chief economist at the National Retail Federation. “Consumer spending has rebounded strongly in the second quarter after two weak previous quarters. Additional job gains and rising wages are supporting the strength in retail sales and should provide momentum going into the second half of 2016.”
Kleinhenz noted that apparel and accessories stores were the one exception, adding that all other retail segments posted monthly gains.
“Outsized gains were evident for building and materials and are probably related to the strength in the housing market,” he said. “The bottom line is that today’s data shows that the consumer sector remains a visible and healthy force in the economy and is expected to fuel growth in the second half of 2016.”
Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, said the “major gainers” were furniture, building material, grocery, health, gasoline, sport goods, general merchandise, department stores and online. Non-store retailers, the bulk of which is e-commerce sales, rose 1.1 percent in June.
But there was one weak spot in the report, he said, noting that “Clothing stores took a hit in June after coming to life in May.”
Overall, Christopher said there is a positive outlook for retail sales in the second half.
“It is beyond a doubt that consumers have shaken off their winter blues,” he said. “Spending gains were broad-based and despite rising gasoline prices, consumers are opening their wallets.”
He said real consumer spending growth in the first quarter hit a 1.5 percent annual rate increase.
“As a result of retail sales and CPI reports (which was also released on Friday), we are upping our outlook for second-quarter real consumer spending growth from 4.1 percent to 4.4 percent,” Christopher said.
The solid retail sales report in June spelled good news for the back-to-school season, as well.
“The b-t-s season is expected to be slightly stronger this year than last, with year-over-year growth of 4.1 percent, compared with slightly less than 4 percent in 2015,” Christopher said.