Ex-auto retail sales jump in June: SpendingPulse

NEW YORK (Reuters) - U.S. retail sales excluding cars jumped in June and posted their biggest one-month rise in seven months, as consumers spent some of their government rebate checks, a private report released on Monday showed.

Consumer spending minus auto sales grew 1.1 percent last month on a seasonally adjusted basis, stronger than the 0.6 percent increase in May, according to SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide (MA.N).

Last November, ex-auto sales rose 1.9 percent.

But much of the sales gain in June was a result of higher costs for gasoline and food, not a huge spurt in demand for discretionary items, said Kamalesh Rao, director of economic research at MasterCard Advisors.

"A lot of the rebate checks are being funneled to food and gasoline. I would be surprised if they would go to non-core spending," Rao said.

U.S. retail gasoline prices have set another series of record highs since May. They averaged more than $4 a gallon, reflecting crude hovering well above $140 a barrel, according to the government.

Retail sales minus cars and gasoline grew 0.6 percent compared with May's 0.5 percent fall.

Gasoline demand has been falling, according to an earlier SpendingPulse report. U.S. drivers pumped an average of 9.426 million barrels per day in the week to July 4, down 1.2 percent from the prior week, it said.

Besides gasoline, costs of other nondurable goods such food and clothing continued to climb. SpendingPulse's index of U.S. nondurable goods was up 10 percent in June from a year earlier, the biggest year-on-year increase since September 2005.

The cost increase in basic household items likely offset weaker demand for them.

Meanwhile, SpendingPulse's "core" gauge on retail sales, which factor out car, gasoline and building materials, rose 1.8 percent last month on a seasonally adjusted basis following a 0.9 percent drop in May.

The core sales increase was the largest since January 2006, when it rose 2.2 percent.

The sales bounce in June could end up being a temporary one once the impact of the rebate check fades later this summer, according to Rao.

"We are bracing for a sustained decline," he said. "The retail picture looks pretty bleak."

The SpendingPulse data are derived from aggregate sales in the MasterCard U.S. payment network, coupled with estimates of all other payment methods including cash and check.

Source: http://news.yahoo.com/s/nm/20080714/bs_nm/usa_economy_spending_dc;_ylt
=AnCxR_eXj.MGNMlFGaUIhV_v5rEF