American consumers spent at a brisk pace in July, pushing U.S .retail sales to their biggest increase in seven months, according to preliminary figures released on August 15.
Auto sales helped drive the mid-summer upswing after sagging for much of the year, posting the biggest gain since December.
Long-suffering department stores likewise showed signs of life, but cheap gasoline and falling sales of electronics and clothing still weighed on sales last month.
Total retail sales rose 0.6% compared to June, with Americans plunking down $478.9 billion in July, the Commerce Department reported. That was 4.2% above the same month last year.
And sales in June were revised up to show a 0.3% increase, after the initially-reported 0.2% decline.
Analysts, who had been expecting an increase of only 0.3% in July, said the result was a strong start to growth in the third quarter.
The strong showing of the latest two months also might help the case in favor of the Federal Reserve raising interest rates a third time in December -- something that had fallen into doubt amid other weak economic data and low inflation.
Strong points in the advance retail sales report for July included the 1.2% jump in sales of autos and building materials.
But gasoline station sales fell gain, dipping 0.4%, although the decline slowed sharply from the 1.5% drop in June.
Excluding cars, retail sales still rose 0.5%, while leaving out the volatile gasoline segment, sales were up 0.7%.
"Stronger retail sales puts the Fed back on track to hike in December," Chris Low of FTN Financial said in a research note.
The strong auto sales came despite industry reports which showed car and truck sales fell 6% from July 2016.
Meanwhile, department stores had their best month since January, rising a full percentage point over June, perhaps easing some fears that brick-and-mortar outlets are facing collapse as consumers switch to internet shopping.
Still, July was even better for the non-store retailers like Amazon and Jet that have soared in recent years, and increased 1.3% compared to June, also their strongest gain since December.
The improved sales are "providing further evidence of consumers' willingness to open their purses for non-essentials due to better confidence in personal finances and the economy," said Mickey Levy of Berenberg Capital Markets.
Copyright Agence France-Presse, 2017
