Retail sales advanced 0.8% in July, the first gain in four months, according to a report released by the Commerce Department. Sales were fueled by strength from the automobile sector, electronics and appliance outlets, and department stores.
The bigger than expected increase followed a 0.7% decline in June that was weaker than first reported. Bloomberg had forecast a 0.3% rise in July. The results have buoyed feelings overall that the economy may be improving, albeit at a moderate pace.
"We're looking for consumption to pick up," Credit Agreicole CIB chief economist Michael Carey told Bloomberg. "There was improved consumer confidence in July plus job gains that were a little better than expected, which is certainly constructive for the household outlook."
Retail sales, which climbed the most since February, followed a quarter in which household spending grew at the slowest pace in a year. Consumer purchases, about 70% of the economy, increased at a 1.5% annual rate from April to June.
All 13 major retail categories showed a gain last month, led by a 0.8% jump at auto dealers, a 0.9% rise at electronics and appliance outlets, and a 0.6% increase at department stores that was the most since September.
Spending increased 0.8% at clothing stores and 0.7% at general merchandise stores. Health and personal care sales jumped 1.1%, the most since May 2011.
Industry data also showed that same-store sales at the more than 20 retailers tracked by Retail Metrics Inc. gained 4.4% in July, almost four times analysts' estimates, after only a 0.3% rise in June.
Sales excluding automobiles and service stations advanced 0.9%, the most since January.