US retail sales advanced again in June, demonstrating the ongoing resilience of US consumers despite economic uncertainty caused by the conflict in the Middle East. While June’s sales growth was a slowdown from May, the underlying data showed less spending on gasoline, which opened the opportunity to raise discretionary spending. In total, seven of 13 retail categories increased over the month, including a boost from Amazon.com’s Prime Day and the FIFA World Cup, which was hosted by the US, along with Canada and Mexico.

• Retail sales in the US rose by 0.2% in June, matching expectations, according to a Bloomberg survey of economists. This marked a slowdown from the revised 1.0% increase in May.
• June’s slowdown was mainly in response to a drop in sales at gasoline stations. Gasoline prices dropped as the US and Iran worked towards an interim peace deal in June. Automotive sales also dropped. Excluding automobiles and gasoline, retail sales rose by 0.4%.
• Online sales posted a strong increase over the month, rising by 1.9%, which was the largest monthly increase in a year. Online sales were buoyed by Amazon.com’s Prime Day.
• US consumers continue to demonstrate their relative resiliency. June’s data was helped by lower gasoline prices. However, recent attacks in the Middle East have pushed up oil prices, which could raise prices at the pump this month, which could weigh on discretionary spending.

June’s retail sales data points to a relatively strong US consumer. Spending could pick up if gasoline prices are largely contained and don’t take a bigger bite out of households’ discretionary spending. However, the opposite is also true if gasoline prices surge higher along with oil prices amid fresh tensions in the Middle East. The US Federal Reserve Board has a lot to consider ahead of its next interest rate decision on July 29.

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