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US: Retail spending rises despite higher interest rates and high inflation

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – Retail spending in the United States rose in July at a much faster rate than it did in the previous month, reflecting what analysts believe is continued resilience from US consumers despite higher interest rates and still-high inflation. July was also the fourth consecutive month that retail sales increased.

Adjusted for seasonality but not inflation, retail sales rose 0.7% in July from the previous month, the Commerce Department reported Tuesday. This was at a faster pace than June’s upwardly revised 0.3% gain and above an expected 0.4% increase.

According to the Commerce Department report, spending rose on nondurable items, including clothing and sporting goods. Sales at restaurants and bars increased by 1.4% in July from the previous months.

However, sales of durable goods made to last at least three years actually fell. For example, sales at furniture stores fell 1.8% in July from June.

“Inflation still plays a role – consumers on the whole are still spending more in order to get less,” Nikki Baird, vice president of strategy at retail technology company Aptos, wrote in an analyst note. “But even with rising debt and high interest rates, July did not appear to see any blanket pullback from consumers, which may not come until student loan payments resume in September.”