US retail sales rose 0.6% in June from the prior month, beating economists’ expectations of a 0.2% gain. Spending climbed across categories, including car dealerships and restaurants, which saw significant increases. While tariffs have started to take a bite on consumer spending, Americans are still opening their wallets.
The Commerce Department’s report showed that sales at gas stations, car dealerships, and building materials were excluded from the calculation, providing a clearer picture of spending. This “control group” was up 0.5% in June, beating expectations. Investors and economic policymakers are keeping an eye on whether Americans continue to spend despite Trump’s tariffs.
Heather Long, chief economist at Navy Federal Credit Union, noted that consumers are willing to buy if they feel they can get a good deal. Businesses reported “softening slightly overall” in consumer spending in early July, with most indicating that consumers are seeking bargains. However, some retailers saw strong sales, particularly in the Northeast.
A resilient labor market is also boding well for spending. Unemployment remains relatively low, and employers have continued to add jobs at a steady pace. The Labor Department reported 147,000 new jobs added in June, beating expectations. Ongoing worker filings for jobless benefits edged higher, but that’s not expected to significantly impact consumer spending.
For now, it seems the US consumer is not cutting back on discretionary spending, such as eating out and alcoholic drinks. Sales at restaurants and bars rose 0.6% in June, beating economists’ expectations. As long as consumers feel they can get a good deal, they will continue to spend.
Source: https://edition.cnn.com/2025/07/17/economy/us-retail-sales-june-spending