U.S. retail sales rebounded in July as households boosted purchases of automobiles and a range of other goods, suggesting solid momentum in the economy early in the third quarter.
The upbeat report from the Commerce Department on Thursday should strengthen expectations of a Federal Reserve interest rate hike as early as next month.
Retail sales increased 0.6 percent last month. June's retail sales were revised up to show them unchanged instead of the previously reported 0.3 percent drop. Economists polled by Reuters had forecast retail sales rising 0.5 percent in July.
Retail sales excluding automobiles, gasoline, building materials and food services rose 0.3 percent after a revised 0.2 percent gain in June. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Core retail sales were previously reported to have dipped 0.1 percent in June. Economists had forecast core retail sales rising 0.5 percent in July.