WASHINGTON: US retail sales rose in July, supported by stronger gasoline and online purchases, but economists warned that a cooling labour market could slow consumer spending in the months ahead.
The Commerce Department said on Thursday that retail sales increased 0.5% last month after edging up 0.2% in June. The gains, however, were uneven across categories, with declines in furniture and electronics sales highlighting household caution.
Gasoline station receipts surged 1.9%, reflecting higher fuel prices, while non-store retailers — largely e-commerce platforms — posted a 1.3% rise. Food and beverage sales advanced modestly, but spending on discretionary items showed signs of strain.
Analysts noted that while retail activity remains positive, weaker job creation and slower wage growth could limit household purchasing power. US employers added fewer jobs in July than expected, signalling potential risks to consumer-driven growth.
“Consumer resilience is being tested as the labour market softens,” said one Washington-based economist. “The second half of the year will hinge on whether wage gains can keep pace with inflation.”
Retail sales are a key driver of the US economy, accounting for more than two-thirds of overall activity. A slowdown could weigh on broader growth momentum at a time when policymakers are balancing inflation control with the need to sustain demand.
The Federal Reserve is widely expected to hold interest rates steady in its next meeting, but pressure may mount if household spending falters more sharply. - Reuters
Oman Observer is now on the WhatsApp channel. Click here
