Retail sales rose solidly last month in a sign that consumers are still spending freely

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Americans increased their purchases at retailers last month – for clothing, dining out, sporting goods and other areas – in a sign that solid consumer spending is still powering a resilient U.S. economy

NEW YORK — Americans increased their purchases at retailers last month – for clothing, dining out, online goods and other areas – in a sign that solid consumer spending is still powering a resilient U.S. economy.

Retail sales rose a better-than-expected 0.7% in July from June, according to the Commerce Department's report Tuesday. The gain was higher than a revised 0.3% increase the previous month and marked four straight months of increases. The figure also surpassed the 0.2% increase in consumer prices last month, indicating that shoppers are spending at a healthy pace.

Analysts noted that spending on Amazon Prime Day, the online juggernaut's big two-day sales event that took place earlier last month, also helped boost online sales.

Excluding autos and gas, sales rose a solid 1%. A closely watched category of retail sales that excludes auto dealers, gas stations and building materials and feeds into the gross domestic product jumped 1% last month compared to the prior month, the biggest move in six months, analysts said.

“Maybe it’s a one-off, but Americans put aside their penny-pinching ways and spent big on food and fun in July," said Robert Frick, corporate economist with Navy Federal Credit Union, in a note published Tuesday.

Department stores posted a 0.9% increase, while clothing and accessories stores had a 1% gain. Sales at sporting goods stores and hobby stores rose 1.5%. At restaurants, sales rose 1.4%, while online sales increased 1.9%.

But higher interest rates are weighing on economic activities that are