Solid sales reports from retailers Thursday took some of the sting out of weak June manufacturing data. And improving trends in unemployment benefit applications provide hope for slightly better job growth in coming months a day before the government reports on July employment.
U.S. retailers reported better-than-expected July revenue in stores open at least a year, an encouraging sign at the beginning of the back-to-school season, the second-biggest shopping season behind the holidays.
A preliminary compilation by the International Council of Shopping Centers of 20 retailers found revenue in stores open at least a year rose 4.6 percent in July, higher than the 3 percent to 3.5 percent the ICSC expected. Economists watch the numbers because consumer spending accounts for 70 percent of U.S. economic activity.
The figures are a key measure of retailers’ health because they exclude newly opened and closed stores.
Analysts said it was a positive sign that Americans hit the mall, undaunted by the fact that there are few signs that the economy is improving.
“I think the U.S. consumer surprised a lot of people,” said Chris Donnelly, global industry managing director for retail at Accenture. “When you look at income, the savings rate, and unemployment, there’s still a lot of cause for pessimism, but the U.S. consumer is amazingly resilient and has spurts of spending.”
And a pair of government reports Tuesday pointed to more weakness with U.S. manufacturing and only slight improvement in the slumping job market.
Companies placed fewer orders with U.S. factories in June than May. The Commerce Department said orders fell 0.5 percent, the third decline in four months. And orders that signal business investment plans dropped 1.7 percent, pulled down by less demand for computers and machinery.
The number of Americans seeking weekly unemployment benefits rose by 8,000 last week to a seasonally adjusted 365,000, the Labor Department said in a separate report. Seasonal distortions caused by fewer temporary layoffs in the auto industry this summer may have skewed the number higher, Labor officials said.