After posting a record 18-percent month-to-month jump in May, U.S. retail sales added another 7.5 percent gain in June.
The size of June’s increase surprised analysts, who had expected a 5-percent bump.
Low interest rates have enticed buyers with secure jobs and higher incomes to purchase homes, cars, and other big-ticket items during the economic shutdown.
New home sales shot up 16.6 percent in May, reaching close to pre-pandemic levels. Sales of luxury homes led the market. Purchases of existing homes dropped during the month, but analysts see signs that sales rebounded somewhat in June.
In the week ending 5 July, new car sales neared volumes forecast for the period before shutdowns were mandated.
Incentives such as Subaru’s offer of 0.9 percent interest for 60 months on its Crosstrek also sealed deals with many buyers.
However, big-ticket durable goods account for only 7 percent of the U.S. economy. The service sector makes up a much larger share, where consumers increased spending by just 5.4 percent in June.
TRENDPOST: Restoring the service sector, where most low-income Americans work, will be key to driving a sustained economic recovery, which, as with the other sectors, will be artificially boosted by unprecedented money pumping by central banks and governments.
