U.S. Retail Sales Surge in July Despite Economic Uncertainties

U.S. retail sales saw notable growth in July, influenced by strong vehicle demand and promotions from major retailers like Amazon and Walmart. While concerns over a weakening labor market and rising goods prices persist, the increase in sales provides a positive outlook for moderate economic growth in the third quarter.

U.S. retail sales experienced a solid increase in July, bolstered by strong demand for motor vehicles and major promotions by retail giants Amazon and Walmart. Despite challenges such as a softening labor market and higher prices, the rise in sales reflects a positive economic outlook for the coming months.

Motor vehicles led the way, with sales at auto dealerships rising significantly. Battery-powered electric vehicle purchases surged ahead of upcoming tax credit expirations. Online sales also grew as Amazon extended its sales promotions, offering substantial discounts on a variety of products.

However, the broader U.S. economy faces potential downside risks, with lower-income households experiencing wage pressure and reduced working hours. Despite these challenges, core retail sales showed resilience, and expectations for inflation have increased, causing analysts to question the likelihood of a Federal Reserve rate cut in the near future.

(With inputs from agencies.)