U.S. Retail Sales (June 2025)

Retail sales rebound in June     

• After moving lower in April and May, retail and food services sales rebounded in June rising by 0.6% month-on-month (m/m) – well ahead of expectations for 0.1% gain. 
• Following two consecutive monthly declines, sales of motor vehicles & parts rose 1.2% m/m. Ditto for sales of building materials, garden equipment & supplies stores, which also moved higher (+0.9% m/m). Sales at gasoline stations were flat. 
• Sales in the "control group", which excludes the three volatile components mentioned above (i.e., autos, gasoline and building supplies) rose by 0.5% on the month, and were up 4% from the year-ago. Sales were higher across all categories, other than home furniture and electronics & appliance stores (-0.1% m/m). Miscellaneous store retailers led the way with sales up 1.8% on the month, followed by clothing & accessories stores and health & personal care stores. 
• Sales at bars and restaurants – the only service category in the report – rebounded by 0.6% reversing the slight decline in May, which is much smaller following revisions (-0.1% up from -0.9% reported previously).

Key Implications

• After two consecutive monthly declines, retail spending rebounded in June, with sales rising across most categories. Notably, sales at bars and restaurants increased, and May’s decline now appears smaller following data revisions. The improvement in sales coincides with recent signs of stabilization in consumer confidence. Although still at a low level, sentiment has steadied in recent weeks as economic uncertainty eased somewhat, financial markets recovered, gas prices declined, and the labor market continued to churn out jobs. 
• Inflation too has so far not reared its head, easing concerns about the immediate impact of tariffs on consumer prices. However, we anticipate that tariff-related effects will become more visible in the coming months. June's inflation data already indicates emerging price pressures in categories such as home furnishings, recreational goods, and apparel—areas where tariffs are having a notable impact. While so far many businesses have tried to absorb higher costs and shield consumers, we expect greater pass through of tariff-related price increases over the summer. The outlook for consumer spending in the months ahead will largely depend on the extent of these price hikes.

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.