U.S. retail sales rose 0.5 percent in July, and business inventories grew in June for the 18th straight month but at the slowest rate in more than a year, the Commerce Department said.
The data suggested that consumers are continuing to spend, although the Thomson Reuters/University of Michigan's preliminary August reading on the overall index on consumer sentiment fell to its lowest level since 1980.
Consumer spending accounts for 70 percent of U.S. economic activity and is watched closely in the transportation industry.
By the Numbers: U.S. Retail Inventory to Sales Ratio
Container ship lines hope the fall peak season for holiday sales will reverse an across-the-board dip in profitability this year. The National Retail Federation and Hackett Associates predict year-over-year growth at top U.S. container ports will resume in September after declines this summer.
Consumers spent more on autos, furniture, clothing and gasoline in July. Excluding sales at gas stations, sales rose 0.3 percent month-to-month. It was the best showing since March. The government also revised sales higher in the previous two months.
The Commerce Department said business inventories rose 0.3 percent in June after an 0.1 percent drop in May.
Wholesale inventories rose 0.6 percent, while retailers’ and manufacturers stockpiles grew 0.2 percent.
July’s retail data indicated increases for several retail categories that generate large volumes of container imports. Sales were up 0.5 percent for furniture, 1.4 percent for electronics stores and 0.5 percent at specialty clothing stores.
Sales at department stores, however, fell 0.8 percent month-to-month. Sales at a broader category of general merchandise stores, which includes department stores and big-box retailers, were flat in July following a 0.5 percent rise in June.
High unemployment and this year’s increase in gas prices have made many consumers more cautious about spending. The Reuters-Michigan consumer sentiment index fell to 54.9 this month, the lowest since May 1980, down from 63.7 in July.