June Retail Sales Stronger Than Expected

U.S. retail sales (search) jumped an unexpectedly large 1.7 percent in June as Americans stepped up spending on cars, gasoline, clothes and other merchandise, a government report showed Thursday.

The 4.8 percent rise in autos and auto parts sales (search) was the biggest since May 2004, as buyers took advantage of employee-discount incentives launched by manufacturers to cut down bloated inventories.

The big gain in retail outlays last month came on the heels of a drop in May and topped economists' expectations. According to a Reuters survey, analysts had expected a 1.0 percent gain in overall sales and a 0.6 percent increase excluding autos and parts.

Excluding this sector, which can swing sharply from month to month, retail sales rose 0.7 percent after a revised flat reading in May. May sales were originally reported as down 0.2 percent.

Sales gained momentum in almost all categories. Department stores, warehouses and other general merchandise retailers saw a 1.2 percent jump in sales after a 0.1 percent gain a month earlier.

Gasoline (search) station sales rose 1.9 percent in June after a 0.5 percent decline in May, while clothing sales climbed 1.0 percent after a 0.9 percent slip the previous month.

Health and personal care store sales fell 0.2 percent, while miscellaneous merchandise stores' sales dipped 0.5 percent.