By Lucia Mutikani
WASHINGTON (Reuters) - U.S. retail sales rose solidly in June as households boosted purchases of automobiles and a range of other goods, cementing expectations for robust economic growth in the second quarter.
The Commerce Department said on Monday retail sales increased 0.5 percent last month. Data for May was revised higher to show sales rising 1.3 percent instead of the previously reported 0.8 percent gain.
May's rise in retail sales was the largest since September 2017. Economists polled by Reuters had forecast retail sales rising 0.5 percent in June. Retail sales in June increased 6.6 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after an upwardly revised 0.8 percent increase in May.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Core retail sales were previously reported to have risen 0.5 percent in May.
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Given the upward revision to May data, the unchanged reading in core retail sales last month likely does not change views that consumer spending accelerated in the second quarter.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked sharply in the January-March period, growing at its slowest pace in nearly five years.
In addition to the solid retail sales data, a sharp narrowing of the trade deficit in April and May has also bolstered expectations of a strong GDP reading in the second quarter. Growth estimates for the April-June quarter are as high as a 4.9 percent annualized rate.
The economy grew at a 2.0 percent pace in the first three months of 2018. The government will publish its snapshot of second-quarter GDP later this month.
The dollar pared losses against a basket of currencies after the data while prices for U.S. Treasuries were lower. U.S. stock index futures were trading slightly lower.
Federal Reserve Chairman Jerome Powell offered an upbeat assessment of the economy last Friday, telling lawmakers that "over the first half of this year, overall economic activity appears to have expanded at a solid pace."
The U.S. central bank raised interest rates in June for the second time this year and has forecast two more rate hikes by the end of 2018. Consumer spending is being driven by a tightening labor market, which is steadily pushing up wages. Consumption is also being supported by tax cuts and savings.
In June, auto sales increased 0.9 percent after advancing 0.8 percent in May. Receipts at service stations rose 1.0 percent on higher gasoline prices.
Sales at building material stores increased 0.8 percent last month after surging 2.5 percent in May. Online and mail-order retail sales jumped 1.3 percent, the biggest gain since November 2017, after rising 0.4 percent in May.
Receipts at furniture stores rebounded 0.6 percent. Sales at restaurants and bars increased 1.5 percent in June.
But receipts at clothing stores fell 2.5 percent, the biggest drop since February 2017. There were also decreases in sales at supermarkets, electronics and appliance stores as well as general merchandise stores.
Spending at hobby, musical instrument and book stores declined further, falling 3.2 percent. That was the largest drop since December 2017.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)