James Knightley, ING's Chief International Economist, discusses June U.S. retail sales data.

"US retail sales rose 0.6% month-on-month in June, a much better outcome than the 0.4% fall the surveys of economists were pointing too. There were downward revisions to May’s growth figure (-1.7% versus the -1.3% rate initially reported), but June’s better growth more than offsets this."

"Vehicle sales were a drag, but not by as much as feared. They declined 2% MoM in value terms, which seems a little odd given unit sales of 15.4mn versus 17.0mn in May."

"The appetite to keep spending was clearly seen in other components with sales excluding vehicles rising 1.3% versus expectations of a 0.4% gain. May’s growth figure was revise down by two tenths of a percentage point, but today’s report is clearly still a positive surprise. Electronics rose 3.3%, clothing was up 2.5%, eating and drinking out was up 2.3%, miscellaneous was up 3.4% and general merchandise was up 3.4%."

"This is an encouraging report that suggests consumer spending momentum remains strong. Moreover, retail sales is typically “only” 40-45% of total consumer spending, which in turn is usually around 65-70% of GDP. Clearly it is a very important component of overall economic activity, but with the economy re-opening there are a greater number of options on which to spend money. We will increasingly see a rebalancing of consumers’ total spend away from "things" that are picked up in retail sales, towards "experiences", such as travel, entertainment and leisure, which are not."