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After a dismal Q1 showing, stronger consumer spending pushed retail and restaurant sales to grow at their fastest pace in over a year last month—up 1.3% from the month before.
“Recent claims of the demise of the US consumer have been greatly exaggerated,” says Capital Economics economist Steve Murphy.
Murphy added that stronger consumer spending could mean a 3% growth rate for Q2, up from Q1’s 0.5% growth.
The sales surge was led by autos, gasoline stations and non-store retailers (e.g. Amazon). Department store spending, on the other hand, saw a 0.3% increase, still lower than a year earlier, the Wall Street Journal reports.
Department store stocks are feeling the poor growth, as a poor earnings outlook from Macy’s sent retail stocks tumbling across the board, including shares of Michael Kors and Ross. [WSJ]
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