Is American spending bouncing back? Retail business up in July
A report by the Commerce Department said retail sales rose in July, a sign that the economy could be improving.
Americans boosted their spending at retail businesses in July by the largest amount in five months, a surge that could help lift the economy out from its slump.
Retail sales rose 0.8 percent in July from June, the Commerce Department reported Tuesday. It was the largest increase since February and followed three months of declines, including a 0.7 percent drop in sales in June.
All major categories rose. Auto purchases increased 0.8 percent. Consumers also boosted their spending on furniture, electronics, building materials and sporting goods.
Financial markets opened higher. The Dow Jones industrial average was up 21 points to 13,190 in the first hour of trading. Broader indexes also rose.
The economy has shown some modest improvement in July. Employers added 163,000 jobs, the best month for job growth since February. Stock indexes are near their highs for the year. And consumer confidence rose for the first time in five months.
"Lower gas prices, a nice rally in stocks and stronger job growth ... helped boost consumer spending," said Jennifer Lee, senior economist at BMO Capital Markets. She said the gain represented a good start for the July-September quarter but further improvement in employment would be needed to ensure further gains in consumer spending.