Economic data arrived by the boatload on Thursday.
Receipts at U.S. retailers increased by 0.2% in June, matching consensus and marking a sharp deceleration from May's 1.0% jump.
Drilling down, the 5.5% drop at the gas pump reflects last month's deflation of crude prices amid progress in U.S.-Iran peace negotiations, while a 1.9% increase in autos/parts provided much of the upside muscle; excluding autos, retail sales dropped 0.2% last month. Sporting goods/hobbies enjoyed a 1.3% increase and non-store retail — which includes online shopping — posted a solid 1.9% increase.
The report shows that "consumers continue to spend at a solid pace as households’ purchasing power improved last month due to lower gasoline prices, and sales received a boost from auto-related purchases, the Amazon Prime Day and the World Cup tournament," writes Kathy Bostjancic, chief economist at Nationwide.
The "control" figure, which excludes autos, gasoline, building supplies and food services — and is most closely correlated with the personal expenditures element of GDP — grew by 0.5%, hitting the expectations bull's-eye.
Switching to the labor market, 208,000 U.S. workers joined the queue outside the unemployment office last week, 3.7% fewer than the week prior and 9,000 shy of economists' predictions.
Ironing out weekly volatility, the underlying trend — as expressed by the 4-week moving average — is sideways with a slight downward bias.
"Initial jobless claims fell to their lowest level since May, consistent with the low and stable layoff rate that has defined the labor market in recent months," says Matthew Martin, senior U.S. economist at Oxford Economics.
Ongoing jobless claims, which are reported on a one-week lag, dipped 0.9% to 1.805 million, or 10,000 fewer than analysts expected.
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