


WASHINGTON — Consumers picked up their spending in June after an earlier pullback, despite anxiety over tariffs and the state of the U.S. economy.
Retail sales rose a better-than-expected 0.6% in June, the Commerce Department said Thursday, after two consecutive months of spending declines: a 0.1% pullback in April and a 0.9% slowdown in May.
Retail was buoyed earlier in the year by car sales as Americans attempted to get ahead of President Donald Trump’s 25% duty on imported cars and car parts.
The erratic consumer spending is taking place during a period of mixed signals about the economy as well. The U.S. economy shrank at a 0.5% annual pace from January through March, but the U.S. job market is proving to be resilient and major tariffs keep getting postponed.
Healthy spending continues, with a heavy focus on necessities, rather than electronics or new appliances. Yet consumers haven’t cut out spending on nonessential goods. Sales at restaurants, the lone services component within the Census Bureau report and a barometer of discretionary spending, rose moderately.
“Consumers are only feeling a modest amount of pressure from tariffs, and any weakness here is not having much of an effect in forcing them to pull back on more discretionary areas of spending such as restaurants and bars,” William Blair’s macro analyst Richard de Chazal wrote.
Yet Chazal fears that the administration may be picking up false assurances from strong consumer spending.
Consumer sentiment and markets have tumbled after aggressive tariff announcements, and many economists expect rising prices to have a greater impact on consumers before the year is over.
Retail sales in June included a 1.2% gain in sales of autos and auto parts. Spending expanded across most major categories, including clothing and personal care. Excluding autos and automotive parts, sales rose 0.5%, according to the Commerce Department.
Clothing and accessories sales rose 0.9%, while health and personal care sales saw a 0.5% bump. Online retailers recorded a 0.4% gain.
Electronics and appliance retailers, furniture stores and department stores saw sales declines. These sectors rely heavily on imported products.
A category of sales that excludes volatile sectors — such as gas, cars and restaurants — rose last month by 0.5% from the previous month. The figure feeds into the Bureau of Economic Analysis’s consumption estimate and is sign that consumers are still spending on some discretionary items.
Heather Long, chief economist at Navy Federal Credit Union, noted that layoffs remain low and consumers are still confident enough that the economy is chugging along.
“The word of the summer for the economy is resilient,” she said in a statement.
The report arrives amid a whipsaw frenzy of on-again, off-again tariffs have that jolted businesses and households. Business owners say it’s become difficult to manage supplies and inventories.