US Retail Sales Rise 0.2% in June Amid Economic Shifts

The United States Department of Commerce reported that retail and food services sales rose 0.2% in June, totaling $768.6 billion. This growth represents the weakest monthly increase in five months and slightly missed economist expectations of a 0.3% gain, following a revised 1.0% jump in May.

Spending growth was primarily driven by a 1.9% increase in both online shopping—boosted by Amazon's Prime Day—and sales from motor vehicle and parts dealers, which were supported by World Cup tourism. Conversely, receipts at gasoline stations plummeted 5.3% due to falling fuel prices, although real gasoline sales rose 4.9% when adjusted for price effects. A control group excluding volatile categories like autos and gasoline saw a stronger increase of 0.5%, with notable gains in electronics and sporting goods.

While inflation cooled to 3.5% annually, economic uncertainty persists. The Federal Reserve System is expected to maintain current interest rates given robust growth and elevated inflation, with the Federal Reserve Bank of Atlanta estimating second-quarter GDP growth above 1%. However, President Donald Trump announced a new blockade in the Strait of Hormuz following renewed U.S. attacks on Iran, a move that threatens to destabilize recent progress in lowering costs.