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US Retail Sales Growth Hits Four-Month High

News, 15 August 2003

Consumer spending continues to lead the US economic recovery, after sales for July rose at the fastest rate for four months.

Latest Commerce Department figures show a stronger-than-expected 1.4% increase in retail sales last month as consumers benefited from tax cuts. This was the quickest growth since March and followed a 0.9% rise in June.

The auto industry led the way with a 3.2% hike; but even excluding this sector, sales climbed 0.8%. Spending also rose at restaurants and bars – a sign of rising confidence.

Consumer expenditure – which accounts for around 70% of US economic activity – has kept the economy afloat during the recent downturn. But there are now signs that businesses are beginning to increase their spending as well.

A separate report from the Commerce Department this week found a 0.1% June rise in business inventories – the first upturn since March. Analysts expect production to increase as companies respond to rising sales by replenishing their depleted stocks.

Data sourced from: USA Today; additional content by WARC staff