WASHINGTON Reuters U.S. retail sales unexpectedly increased in June as demand for goods remained strong even as spending is shifting back to services, bolstering expectations that economic growth accelerated in the second quarter.
Retail sales rebounded 0.6 last month, the Commerce Department said on Friday. Data for May was revised down to show sales falling 1.7 instead of declining 1.3 as previously reported.
Economists polled by Reuters had forecast retail sales dropping 0.4. But shortages of motor vehicles because of a global semiconductor supply squeeze, which is undercutting production, are hampering sales of automobiles.
Sales of some household appliances have also been impacted by the chip shortage.
We expect supply issues and dwindling auto inventories to continue to limit auto sales in the coming months, said Veronica Clark, an economist at Citigroup in New York.
Demand shifted to goods like electronics and motor vehicles during the pandemic as millions of people worked from home, took online classes and avoided public transportation.
Spending is now rotating back to services like travel and entertainment, with at least 160 million Americans fully vaccinated against COVID19. Retail sales are mostly goods, with services such as healthcare, education, travel and hotel accommodation make the remaining portion of consumer spending.
Restaurants and bars are the only services category in the retail sales report.
Excluding automobiles, gasoline, building…