Retail sales jump in July

By Bernie Becker - 08/14/12 10:15 AM ET

Retail sales in the United States increased in July for the first time in four months, the Commerce Department reported Tuesday.

The 0.8 percent increase, up to roughly $404 billion, was also the largest month-to-month boost since February.

The size of the jump also surprised analysts, who had expected around a 0.2 to 0.3 percent increase. With consumer spending amounting to about 70 percent of demand in the economy, Tuesday’s numbers could also signal more sizable economic and job growth in the months to come.

Those factors are expected to play a large role in November’s election, even as presumptive GOP presidential nominee Mitt Romney’s recent selection of Rep. Paul Ryan (R-Wis.) as his running mate has currently shifted attention to deficit reduction and entitlement reform.

In Tuesday’s report, the Commerce Department found sales increases in all of the more than dozen sectors that it tracks.

Sporting goods and furniture sales all jumped by more than a percent, as did receipts in the health sector. Clothing and car-related sales also saw a 0.8 percent jump.

Retail groups suggested the back-to-school rush could be playing a role in the increase, but also said the economy and their sector still faces possible stumbling blocks.

Washington faces a number of big-ticket fiscal issues at the end of the year, including the looming expiration of Bush-era tax rates. And on the other side of the Atlantic, the struggling eurozone saw its economy contract by 0.2 percent in the second quarter, according to data released Tuesday.

"Sustained retail growth hinges on Congress’ and the administration’s ability to make smart decisions about the economy and Americans’ confidence in our long-term recovery," Matthew Shay, the chief executive of the National Retail Federation, said in a Tuesday statement.

The jump in consumer sales comes as job growth also rebounded in July, with the economy adding 163,000 jobs after more disappointing gains in the four previous months. The unemployment rate, currently at 8.3 percent, has been north of 8 percent for almost all of President Obama’s term in the White House.

Economic growth also slowed to 1.5 percent in 2012’s second quarter, amid those more sluggish jobs numbers; analysts hope the retail numbers and other factors suggest a better third quarter for gross domestic product.

—This post was updated at 11:08 a.m.