Consumer Debt

The backbone of America’s economy remains solid, despite a slowing job market, elevated interest rates and still-high inflation, CNN reported. Sales at U.S. retailers unexpectedly surged in July, the Commerce Department said, rising by a solid 1% from the prior month, up from June’s downwardly revised 0.2% decline. That trounced economists’ expectations of a 0.3% gain. Retail sales, which are adjusted for seasonal swings but not inflation, make up a sizable chunk of overall spending. July’s reading is a boon for the U.S. economy because the country’s economic growth hinges on Americans spending their dollars. It is the economy’s latest show of strength in the face of several economic hurdles squeezing the U.S. consumer. The Dow closed 555 points, or 1.4% higher, as investors cheered the retail sales report. The S&P 500 gained 1.6%, and the Nasdaq Composite added 2.3%. Sales jumped across most categories last month, rising the most at car dealerships. Those sales spiked by 3.6% in July. Excluding that category, retail sales were up by a still-strong 0.4% in July from June.