|Month over Month||0.2%||0.4%||-0.3%||-0.4%|
|Year over Year||1.7%||1.7%|
Retail sales saw their first increase in three months in July. A 0.4 percent rise versus June was unexpectedly robust and the largest since April but, while fully reversing the previous period's steeper revised 0.4 percent drop, only enough to leave unadjusted annual growth unchanged at 1.7 percent. Volumes similarly increased 0.4 percent on the month.
July's monthly advance was flattered by a disproportionately large 0.5 percent gain in food purchases, their first rise in three months. Excluding this category sales were up only 0.2 percent after a cumulative 0.5 percent decline in May/June.
The level of real sales in July was 0.2 percent above the second quarter average when purchases also rose 0.2 percent from January-March. With buying intentions up quite sharply in August according to the latest Istat survey, it looks as if household goods spending made at least a modest contribution to third quarter GDP growth.
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The monthly change in the headline figure, which is reported in volume terms, is only disaggregated into food and non-food categories.
With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
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