WASHINGTON — The hot, dry weather that has caused grief for many U.S. farmers proved to be a boon for the nation's retailers in June as consumers rushed to purchase items ranging from summer clothes to air conditioners.
The Commerce Department said Thursday that retail sales rose a moderate 0.5% to a seasonally adjusted $132.8 billion last month. It said sales rose 0.3% in May, an upward revision from the previous estimate of 0.1%.
Much of the strength in June came at department stores and other general merchandise outlets, where sales jumped 1.87% to $15.2 billion, the strongest gain since last August, when the rise was 1.94%.
In a report last week, major department stores had reported strong sales of air conditioners, summer clothes, barbecue equipment and sporting goods.
"I think what we're seeing is the upside of the current weather situation," said James Newton, head of Economic Perspectives Inc., a Delaware, Ohio, consulting firm.
"In the short term, the heat is helping boost sales of all kinds of things: lawn furniture, sprinkling systems. Also, by this time, generally retailers would be heavily marking down summer clothing. They haven't had to do that," Newton said.
Automotive sales also were strong, posting a 1.2% gain to $29.7 billion. They had been off 0.8% in May and 1.1% in April.
Excluding autos, the June sales increase was 0.3%, down from a 0.6% gain in May.
Offsetting increases at auto showrooms and department stores were declines in two areas linked to the housing market, which has been softening this year.
Sales of building supply materials and hardware dropped 1.0%, and furniture sales were off 0.5%.
Overall, analysts said the moderate June increase should ease fears in the financial markets that a too strong economy poses the danger of inflation.
"This is confirmation that consumers certainly haven't retrenched to a serious degree," said Sandra Shaber, an economist with the Futures Group in Washington. "But on the other hand, there's no sign that consumers are going to heat up prices."
For the first six months of the year, overall sales were up 6.4% over the same period a year ago. However, excluding autos, first half sales were up only 4.6%, barely ahead of the 4.4% consumer inflation rate for January through May.
"Real retail sales, adjusting for increases in the prices of consumer goods, have really been extremely flat," said David Levy of Levy Economic Forecasts of Chappaqua, N.Y. "The retail sector is one of the weakest sectors in the economy right now."
Sales of durable goods--"big ticket" items expected to last more than three years--were up 0.5%. Sales of non-durable goods rose 0.6%.
There were gains of 1.6% at specialty clothing stores, 0.4% at restaurants and bars, and 0.3% at gasoline stations.
Food and grocery store sales were down 0.4%, a surprise to some economists who expected drought-related price increases to inflate sales figures. Drugstore sales were down 0.5%.