- Deutsche Bank
US retail sales rose more than expected in July, as Americans increased purchases of automobiles and clothing, giving the US economy a boost in the third quarter. The upbeat data should strengthen the expectations of the Fed's interest rate hike as early as next month. Retail sales climbed a seasonally adjusted 0.6% in July from a month earlier, the Commerce Department reported. Excluding cars, sales rose 0.4% in July, the third straight month of solid gains. Consumer spending accounts for about 70% of economic output of the US, and thus is an important measure of the economy's vitality. Retail sales represent a significant share of overall consumer spending. Americans are receiving a boost by several factors that could result in sustained gains over the course of coming months. Robust job growth over the past year and a half has increased the number of people with paychecks, while a decline in gasoline prices to $2.63 nationally, down 25% from the previous year, has cut their costs.
Meanwhile, the number of Americans seeking unemployment benefits unexpectedly rose in the week ended August 8, but the trend continued to suggest a strengthening labour market. Initial claims for state unemployment benefits climbed 5,000 to a seasonally adjusted 274,000 last week, according to the Labor Department.
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