Consumers increased their spending from May to June, underscoring their resilience despite higher prices at gas stations and in grocery store aisles, and allaying fears that the economy could be on the brink of a meltdown. recession.
The retail sales In the United States they increased 1% in June, compared to a revised decline of 0.1% in May, the Commerce Department reported on Friday.
The figures are not adjusted for inflation, so they largely reflect rising prices, especially for gasoline. But they also show that consumers are still providing crucial support to the economy and spending on discretionary items like furniture, restaurant meals and sporting goods.
At the same time, last month’s spending increase is modest enough not to encourage the Federal Reserve to raise interest rates even more aggressively. Stock prices rose after the release of the report.
“People didn’t buckle in the face of the Ukraine shock and the subsequent spike in food and energy prices,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “Instead, they depleted a small portion of their pandemic savings to maintain their discretionary spending.”
Consumers still have significant savings, on average, bolstered by pandemic-era government relief checks and hefty hiring and pay raises. JPMorgan executives said Thursday that their customers continue to draw their credit and debit cards at a healthy pace.
