WASHINGTON – US retail sales held steady in July as gas prices fell sharply, but the new data showed consumers are still spending, keeping the pressure on the Federal Reserve to continue its aggressive interest rate hikes.
Americans flush with savings have been a key driver of the US pandemic recovery, and the Fed is keeping a careful eye on economic data as it battles to quash red-hot inflation without tipping the world’s largest economy into recession.
While the headline data of the closely-watched report flatlined at $682.8 billion, rather than rise slightly as economists had expected, sales increased 0.7 percent when gasoline and motor vehicles are excluded from the calculation, the Commerce Department said.
“Despite the flat headline reading, the core retail sales figures in July show the consumer has staying power,” Kathy Bostjancic of Oxford Economics said.
“Today’s solid report keeps the Fed in an aggressive policy…