Axios | The economy is on firmer footing than previously thought: Blowout consumer spending last month shows shoppers are not pulling back in a way that would be consistent with a recession.
Why it matters: The “consumer slowdown” narrative fell apart last month. If it continues, that — along with receding inflation — could keep the soft landing alive.
By the numbers: Retail sales surged 1% in July, well above the 0.3% increase economists expected. That’s the biggest pop in retail sales since the beginning of last year.
Consumers also upped spending at electronics shops (+2%), supermarkets (+1%) and building material stores (+1%). Sales fell most in the catch-all category for miscellaneous stores (-2%) and sporting goods retailers (-1%).
It was a strong rebound from the 0.2% decline in June, which was revised lower from initial data showing that retail sales were flat.
The auto sector was responsible for much of the spending jump last month. Sales rose over 3% — about as much as sales fell in June when a cyberattack froze operations for car dealers.