By Sabrina Escobar

Spending rose at a faster clip than expected in June as American consumers once again buck concerns that slowing economic conditions and tariff-related price increases would crimp spending.

Retail sales increased 0.6% in June from May, according to data released Thursday by the Census Bureau. Economists polled by FactSet expected a 0.2% increase following a 0.9% decline in May.

Core retail sales, which strip out sales of cars, car parts, and gasoline, rose 0.6%, also better than the consensus for 0.2%.

On an annual basis, sales rose 3.9%.

Most of the 13 categories tracked by the Census Bureau notched gains in June, with miscellaneous store retailers seeing the biggest increase -- up 1.8% from May -- followed by motor vehicle and parts dealers, up 1.2%, and home improvement stores and clothing and accessories stores, both 0.9% higher from the prior month.

Only two main categories -- home furnishing stores and places selling electronics and appliances -- saw monthly declines, both down 0.1%. Department store sales, a subcategory within general merchandise sales, were down 0.8% even though the broader category increased 0.5%.

The report rounds out a slew of economic data released over the course of the week that investors have been anxiously awaiting to help "sketch out a landscape for how trade policy is affecting the economy," wrote Glenmede's investment strategy team in a note Monday.

June's reading of the consumer price index, released Tuesday, suggested that higher tariffs are starting to trickle down into consumer prices. Headline inflation rose to an annual rate of 2.7% in June from May's 2.4% gain, with discretionary categories such as food, household furnishings, recreation, and apparel seeing notable price increases.

Thursday's retail sales data suggests that consumers aren't yet balking at the higher prices, and reflect what big banks, economists, analysts, and retailers have said to describe the current consumer mind-set: Americans are cautious, but resilient.

"We continue to struggle to see signs of weakness...the consumer basically seems to be fine," said Jeremy Barnum, JPMorgan's chief financial officer, during the company's earnings call Tuesday.

Wells Fargo CEO Charlie Scharf had a similar message. He noted that credit-card spending growth, despite having softened "very slightly" in the second quarter, is still up year over year and remains strong overall, while consumer delinquencies have continued to decline.

"What we see regarding the health of our clients and customers has not changed. Consumers and businesses remain strong as unemployment remains low and inflation remains in check," Scharf said on an earnings call Tuesday.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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July 17, 2025 09:08 ET (13:08 GMT)

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