- Retail and food services sales rose 0.2% month-over-month (m/m) in June, in line with expectations for a 0.3% gain. On an inflation-adjusted basis, retail sales rose by 0.6% on the month.
- Sales at gasoline stations (-5.3% m/m) were lower, but that was entirely due to a sharp drop in prices at the pump. Removing the price effects, real gasoline sales were higher by 4.9%. Meanwhile, sales of autos and parts remained robust, advancing by 1.9% m/m in June and were up 3% on the second quarter, a notable acceleration relative to the prior two quarters. Sales at building materials and garden retailers were little changed (+0.1% m/m).
- Within the “control group”—which excludes volatile sales of gasoline, autos and parts, and building materials and garden equipment—sales fared better than the headline, advancing by 0.5% m/m. There were notable gains at sporting goods stores (+1.3% m/m) and electronics and appliance retailers (+0.8% m/m). Sales at non-store retailers, continued to rise at a brisk pace (+1.9% m/m). Zooming out, non-store sales are up 14.2% from a year ago.
- Sales were little changed to lower in the remaining categories, such as food and beverage stores (+0.2%), general merchandise stores (+0.1%), and health and personal care stores (-0.8%).
- Spending at bars and restaurants—the only service category included in the report—remained flat in June and were up only 3.8% y/y, down from 6.8% y/y growth in June 2025.
Key Implications
- Retail sales posted a modest headline gain in June, as lower gasoline prices weighed on nominal gas station receipts and held back overall growth. However, the underlying details were more encouraging, with solid gains in control group sales and inflation-adjusted spending. With respect to inflation, the latest CPI report also showed that price pressures broadly eased in June, offering some reprieve to inflation-wary consumers.
- Overall, this was a solid report, suggesting that consumer spending remains on track to increase by about 2% annualized in Q2 – a notable pick up from Q1’s 0.5% and consistent with our economic forecast. While some pockets of caution remain—such as modest growth in sales at bars and restaurants and grocery stores—consumer spending remained resilient through a second quarter, as elevated energy prices were partially offset by higher tax refund checks, rising equity market valuations, and some stabilization in the labor market.
