Retail sales probably increased in July, say US economists

The US economists said that the ales at US retailers probably rose in July for the first time in four months as employment picked up, easing concern the expansion is faltering.The projected 0.3 percent advance in purchases would follow a 0.5 percent drop in June, according to the median forecast of 65 economists surveyed by Bloomberg News ahead of the Commerce Department figures on Aug. 14. Other reports may show the cost of living increased and factory production climbed last month.Larry Kantor, head of research at Barclays Capital, and Michael Gurka, managing director at Spectrum Asset Management, talk about the global economic outlook and investment strategy.Gains in purchases at places like Gap Inc. and Macy’s Inc. (M) indicate American households are looking beyond the global economic slowdown as hiring improves. At the same time, unemployment in excess of 8 percent is thwarting a binge in spending as consumers look to repair finances and pay down debt.Households struggled to support the expansion last quarter. Consumer purchases, about 70 percent of the economy, grew at a 1.5 percent annual rate from April to June, the weakest in a year, according to Commerce Department data.Economists project the retail sales category in the report used to calculate gross domestic product, which excludes auto dealers, building-material stores and service stations, will show a 0.4 percent gain in July following a 0.1 percent decline the prior month.July’s increase comes after same-store sales at the more than 20 companies tracked by Retail Metrics Inc. rose 4.4 percent that month, almost four times analysts’ estimates, compared with a 0.3 percent increase in June.Sales at Gap, the biggest U.S. specialty-apparel retailer, climbed 10 percent last month from the same period in 2011. Macy’s, the owner of its namesake and Bloomingdale’s department stores, posted a 4.1 percent gain.Underpinning the stronger sales, payrolls increased by 163,000 in July, the most in five months, according to Labor Department figures. While the improvement eased fears the U.S. labor market might continue stumbling following a second-quarter slowdown, the jobless rate rose to 8.3 percent.