Retail sales rose at their fastest pace since July of last year, gaining 1.5 percent in June following a revised minus 0.4 percent in May in real terms. Compared to June of last year, sales were up 1.6 percent.

The monthly change was helped by a 4.2 percent increase for sales of communications and information equipment, the biggest increase since July 2024. At the same time, consumers spent 3.1 percent more shopping at markets, mail-order houses, and via the internet after a 1.3 percent decline in June. Not since March 2021 have consumer spent more shopping via these channels.

Sales of household goods, textiles, and home furnishings was the only major category to decline, down 0.2 percent in June after a 0.5 percent gain the previous month.

Today's result is a very positive sign for the economy, but should also be taken with a pinch of salt as consumers were perhaps moving up planned purchases ahead of the August 1 deadline to reach a trade agreement with the US.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The survey comprises around 4,000 companies with the small-sized firms asked to provide monthly turnover data on a quarterly basis. Statistics are provided in both nominal and volume measures; the latter is the more important for financial markets. The headline figure is the annual growth in sales volumes adjusted for differences in trading days. Seasonally adjusted monthly changes are also provided. Details are limited in the first estimate but a more complete picture is provided with the following month's release.

Consumer spending accounts for a large portion of the economy, so if you know what consumers are up to, you will have a pretty good idea on where the economy is headed. Needless to say, that is a big advantage for investors. 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. Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.