Aug. 14 (Bloomberg) -- Retail sales in the U.S. rose more than forecast in July as consumer spending rebounded at department stores, auto dealers and electronics outlets, easing some concern the biggest part of the economy was foundering.
The 0.8 percent advance, the first gain in four months, followed a 0.7 percent decrease in June that was weaker than first reported, Commerce Department figures showed today in Washington. Economists projected a 0.3 percent rise, according to the median forecast in a Bloomberg survey. Sales excluding automobiles also climbed 0.8 percent.
Improved sales at merchants such as Gap Inc. and TJX Cos. indicate American households are looking beyond the global economic slowdown as hiring improves. At the same time, joblessness in excess of 8 percent is keeping consumer spending from surging, consistent with the Federal Reserve’s view that economic growth will “remain moderate over coming quarters.”
“We’re looking for consumption to pick up,” said Michael Carey, chief economist for North America at Credit Agricole CIB in New York. “There was improved consumer confidence in July plus job gains that were a little better than expected, which is certainly constructive for the household outlook.”
Stocks climbed as the report bolstered optimism the economic expansion will be sustained. The Standard & Poor’s 500 Index rose 0.2 percent to 1,407.2 at 9:37 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10- year note up to 1.72 percent from 1.67 percent late yesterday.
Retail sales, which climbed the most since February, were projected to rise following June’s previously reported 0.5 percent drop, according to the Bloomberg survey. Estimates from the 85 economists surveyed ranged from a decrease of 0.2 percent to a gain of 0.8 percent.
Today’s report showed the retail sales category used to calculate gross domestic product, which excludes sales at auto dealers, building material stores and service stations, increased 0.9 percent after a 0.2 percent decrease in June.
The pickup in retail sales last month followed a quarter in which household spending grew at the slowest pace in a year. Consumer purchases, about 70 percent of the economy, expanded at a 1.5 percent annual rate from April to June, according to Commerce Department data.
All 13 major retail categories showed a gain last month, led by a 0.8 percent jump at auto dealers, a 0.6 percent rise at department stores that was the most since September, and a 0.9 percent gain at electronics and appliance outlets.
Spending increased 0.8 percent at clothing stores and 0.7 percent at general merchandise stores. Health and personal care sales jumped 1.1 percent, the most since May 2011.