US Retail Sales Rise 0.2 Percent in June as Jobless Claims Fall to 208,000 and Factory Sentiment Surges
A run of United States data released on 16 July showed a cooling consumer alongside a firm labour market and a jump in factory sentiment, among the final major releases before the Federal Reserve’s communications blackout begins on 18 July. Retail sales rose 0.2 percent in June, weekly jobless claims fell to 208,000, and the Philadelphia Federal Reserve’s manufacturing index jumped to 41.4, its highest since November 2021.
Retail sales cooled after a strong spring. The Census Bureau reported total retail and food services sales rose 0.2 percent on the month to 768.6 billion dollars, though the reading is statistically soft, as its confidence interval includes zero, and it followed an upwardly revised 1.0 percent gain in May. Sales excluding autos fell 0.2 percent, while sales excluding both autos and gasoline rose 0.4 percent, a Census line that is narrower than but not the same as the retail control group used in GDP. The headline was held back by fuel: receipts at gasoline stations fell 5.3 percent, while sales excluding gasoline rose 0.7 percent. Sales were 6.7 percent higher than a year earlier.
The labour market stayed tight. Initial claims for unemployment benefits fell to 208,000 in the week ending 11 July, down 8,000 from a revised 216,000, and the four-week average eased to 214,250, the Labor Department reported. Continuing claims, a proxy for how long people stay unemployed, fell 16,000 to 1.805 million. Manufacturing sentiment, meanwhile, surged: the Philadelphia Fed’s general activity index rose to 41.4 in July from 10.3 in June, with new orders up to 37.0 and shipments to 33.7, though the prices paid index edged up to 53.9 from 53.2 and the survey’s forward-looking measures softened, with the future activity index falling to 34.4 from 50.2.
Read together, the numbers describe resilience rather than acceleration, our reading. The headline retail gain was small and statistically soft, but the weakness was concentrated in fuel: stripping out gasoline stations, where receipts fell 5.3 percent, sales rose a firmer 0.7 percent, our reading. The Philadelphia Fed index leapt about 31 points in a single month, our calculation, one of its sharpest jumps on record, but regional surveys are volatile, the survey’s forward-looking indicators weakened, with future activity down to 34.4 from 50.2 and future new orders down to 35.1 from 60.8, and the prices paid reading near 54 points to persistent cost pressure. Claims at 208,000 remain historically low.
Why it matters: The data give the Federal Reserve a picture of an economy still growing with a firm labour market and cooling but positive consumer spending, which argues for holding rates at the 28 and 29 July meeting rather than cutting, even as the elevated prices paid index keeps the inflation watch alive. It is among the last major reads before officials enter their communications blackout. For the dollar-pegged Gulf economies, whose rates track Fed policy, a Fed that stays on hold keeps regional monetary settings steady.
Outlook: The next markers are June import and export prices, industrial production and housing data due on 17 July, followed by the Federal Reserve’s policy decision at the end of the month, where the balance between resilient activity and still-sticky prices will be weighed.
| Indicator | Latest | Prior or note |
|---|---|---|
| Retail sales, June month on month | up 0.2 percent | After up 1.0 percent in May |
| Retail sales excluding autos and gasoline, June | up 0.4 percent | Census line, not the GDP control group |
| Retail sales excluding gasoline, June | up 0.7 percent | Gasoline station receipts fell 5.3 percent |
| Retail sales, year on year | up 6.7 percent | |
| Initial jobless claims, week to 11 July | 208,000 | Down 8,000 from 216,000 |
| Continuing claims | 1.805 million | Down 16,000 |
| Philadelphia Fed activity, July | 41.4 | From 10.3 in June |
| Philadelphia Fed new orders, July | 37.0 | From 27.3 in June |
| Philadelphia Fed prices paid, July | 53.9 | Up from 53.2 |
| Philadelphia Fed future activity, July | 34.4 | Down from 50.2 |
Sources: US Census Bureau; US Department of Labor; Federal Reserve Bank of Philadelphia.
