US Retail Sales Rebound in June, Excluding Auto Sector Impact

US retail sales, excluding the impact of a cyberattack on auto dealerships, rose in June by the most in three months, a sign consumers regained their footing at the end of the second quarter. Retail purchases less motor vehicles rose 0.4% last month after an upwardly-revised 0.1% advance in May. Total retail sales were unchanged, restrained by a 2% slide in receipts at auto dealers. The figures aren’t adjusted for inflation. The data buck a trend in recent months showing a gradual slowdown in consumption growth as Americans feel the pinch of high interest rates and a cooling labor market, suggesting the economy is still holding up as the Federal Reserve nears a start to rate cuts. “Consumption and economic activity have downshifted significantly so far in 2024. But conditions are far from weakening to a point that would be considered recessionary,” Rubeela Farooqi, chief US economist at High Frequency Economics, said in a note. “We think the data on spending and growth combined with improving inflation readings support an easing in the stance of monetary policy.” Of the 13 categories tracked by the Commerce Department, only three registered declines. Those included sales of gasoline, reflecting lower prices in the month. Sales at sporting goods stores also edged lower. Excluding receipts at filling stations and auto dealers, retail sales jumped 0.8% — the most since the start of 2023. Market Overview:

• Retail sales excluding autos rose 0.4% in June.
• Total retail sales were unchanged due to a 2% drop in auto sales.
• Non-store retailers and health stores saw the biggest gains.

Key Points:

• Cyberattack on auto dealerships affected sales figures.
• Control-group sales, used to calculate GDP, advanced 0.9%.
• Economists expect an easing in monetary policy stance.

Looking Ahead:

• Automakers expect sales to bounce back in July.
• Personal consumption expenditures data to provide more inflation-adjusted spending details.
• Federal Reserve nearing a start to rate cuts.

Thousands of dealerships were hamstrung during their end-of-quarter sales push by a cyberattack on software provider CDK Global in mid-June. AutoNation Inc., one of the biggest chains in the industry, warned in a regulatory filing on Monday that the incident cost the company a significant chunk of second-quarter earnings. Automakers and dealers have said the hack mostly only deferred sales, as opposed to costing them permanent business, meaning the industry expects to see a bounce back in July. So-called control-group sales — a grouping of the retail data used to calculate gross domestic product — advanced a solid 0.9% in June, matching the largest increase since April 2023. The measure excludes food services, auto dealers, building materials stores and gasoline stations. The retail sales figures largely reflect purchases of goods, which comprise a relatively narrow share of overall consumer outlays. Goods prices fell 0.4% for a second straight month in June, according to Bureau of Labor Statistics data published on July 11. Data on personal consumption expenditures due later this month will provide more details on inflation-adjusted spending for both goods and services in June.