US retail sales perk up in July; unemployment claims fall further by 7,000 last week

The US retail sales jumped one percent in July, blowing past estimates and marking the largest increase since January of 2023.

The surprising rebound in spending comes after a 0.2 percent drop in June.

Data from the Commerce Department out Thursday showed receipts at motor vehicle and parts dealers surged, as did sales at electronics and appliance outlets, Reuters reported.

Consumers also spent more last month at building materials, garden equipment and furniture stores, Reuters reported.

Sales at restaurants and bars, the only services component in the report, also rose.

Economists view dining out as a key indicator of household finances.

Strong retail sales weren’t the only sign of the country’s continued economic resilience.

US unemployment claims decline for second week

A separate report from the US Labour Department on Thursday showed the number of Americans filing new applications for unemployment benefits dropped last week for the second week in a row.

Initial claims for state unemployment benefits dropped 7,000 to a seasonally adjusted 227,000 for the week ended August 10, the Labour Department said.

This is the second straight weekly decline, and erased the increase in late July, which had boosted claims to an 11-month high.

Investors have been on edge after a jump in the unemployment rate to a near three-year high of 4.3 percent in July sparked fears that the economy was either in recession or nearing a downturn, concerns not shared by most economists.

“Fed officials need not worry themselves to death about the outlook because the downside risks to the economy are fading fast with fewer job layoffs and robust consumer spending,” the Reuters report said, citing Christopher Rupkey, chief economist at FWDBONDS.

“The economy is not going off the rails,” he said.