6 Top-Ranked Stocks To Buy As Retail Sales Remain Robust

In June, retail sales increased substantially, marking the fifth straight month of gains. Though autos and gasoline led the charge, gains were largely broad-based. It seems that a combination of tax cuts and consistent job additions are supporting growth in household purchases.

Additionally, retail sales for May were revised upward, providing credence to the view that consumer spending likely increased during the second quarter. Investing in stocks from the retail sector would make for a profitable proposition now since such a trend bodes particularly well for consumers.

Autos, Restaurants, Online Sellers Lead Gains

According to the Department of Commerce, retail sales increased by 0.5% during the month of June, in line with the consensus estimate. Retail sales have increased 6.6% year over year, a touch above the long-run average since 1980. Additionally, May’s increase was revised substantially upward, from 0.8% to 1.3%. This is the fastest pace of growth witnessed since September 2017.

Gains took place across eight out of 13 categories. Auto sales advanced by 0.9% after increasing by 0.8% in May. Sales at gasoline stations increased by 1%, boosted by a spike in gasoline prices. Nonstore retailers, which include online sellers, experienced a 1.3% increase in sales, the highest since November.

Additionally, sales at health and personal care stores increased by 2.2%, the fastest pace of gains since 2004. Sales at restaurants and building material stores increased by 1.5% and 0.8%, respectively. Furniture and home furnishing stores experienced a 0.6% increase in sales.

Sales Spike, Trade Deficit Dip Likely to Boost Q2 GDP

Some major retail categories also witnessed declines. Sales at food and beverages stores declined 0.3%, which is the most in a year. Department store sales suffered a 1.8% decline, the largest since 2016. Meanwhile, clothing stores saw sales fall by 2.5%, the highest decline since February 2017.

Retail sales excluding gasoline, autos, building materials, and food services remained unchanged over the month of June after increasing by 0.8% in May. This core portion of retail sales closely corresponds to the consumer expenditure component of GDP.

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