Despite Soaring Prices, US Consumers Spent More... June Retail Sales Up 1%

[Asia Economy New York=Special Correspondent Joselgina] Despite soaring inflation, indicators show that American consumers are spending more money.

According to the U.S. Department of Commerce, June retail sales, seasonally adjusted, increased by 1.0% from the previous month to $680.6 billion. This marks a return to growth after a decline last month. U.S. retail sales had increased for four consecutive months from January this year but saw a downturn in May (-0.1%).

This figure also exceeded experts' expectations of a 0.9% increase. Despite high inflation and growing recession concerns, the news that consumption?which accounts for two-thirds of the U.S. economy?has returned to an upward trend somewhat alleviates economic worries. Core retail sales rose 0.8% from the previous month.

By category, increased spending was observed across various sectors including furniture, groceries, gasoline, and even dining out. However, consumption in clothing, building materials, and department stores declined.

Some analysts argue that the increase in retail sales is due to rising product prices. They explain that consumers are paying more for the same goods, which causes the consumption indicators to rise.

Sal Guatieri, Chief Economist at BMO Capital, said, "This is not spending to buy more goods but increased consumption to cope with higher prices." Earlier released data showed that the U.S. Consumer Price Index (CPI) for June rose 9.1% compared to the same month last year, marking the steepest increase since December 1981.