In June, US retail sales increased by 0.6% month-on-month, exceeding expectations, showing that consumer resilience is temporarily slowing down the pressure of tariff transmission.

The U.S. retail market is showing a comprehensive rebound, providing a positive signal to alleviate concerns about consumer spending contraction in the market. The latest data released by the U.S. Department of Commerce on Thursday showed that after consecutive declines in the first two months, non-inflation-adjusted retail sales achieved a 0.6% month-on-month increase in June, exceeding all economists' forecasts. Excluding the fluctuation of automobile sales, core retail sales maintained a growth momentum of 0.5%. Among the 13 retail categories surveyed, 10 industries saw month-on-month growth, with automobile sales rebounding after continuous declines serving as the main driving force. It is worth noting that as the only service industry indicator in the retail report, food and beverage consumption continued to grow, with a monthly increase of 0.6%. This report to some extent alleviated concerns about consumers' financial health, although recent tariff policy adjustments causing price fluctuations continue to draw attention, the pessimistic sentiment of the public towards the economic outlook has shown marginal improvement. The subtle changes in current market sentiment are closely related to the policy environment. Although U.S. President Trump recently escalated tariff threats against major trading partners again, related tariffs on goods will officially take effect next month, a temporary reassurance was provided by the rollback of some earlier tariff measures, boosting market confidence. It is worth noting that the latest inflation data shows a significant increase in prices of high-tariff goods such as toys and appliances, indicating that import costs are gradually being transmitted to end consumers. The impact of this price transmission mechanism on the direction of the Federal Reserve's monetary policy remains uncertain, with policymakers currently focusing more on whether tariff shocks will create sustained inflationary pressures or are short-term one-off impacts. The Federal Reserve faces a dilemma in policy-making. Although the 0.6% growth in food and beverage consumption in the June retail data shows resilience in the service industry, Powell emphasized at a congressional hearing that it is necessary to observe whether the price increases caused by tariffs are sustainable. Until a clear judgment is reached, the Federal Reserve is expected to continue to maintain stable interest rates at this month's meeting. Goldman Sachs' model predicts that if trade policies remain stable, the Federal Reserve may implement three rate cuts within the year, bringing the terminal interest rate to 3.25%-3.5%. However, expectations for a rate cut in December have weakened in the market, reflecting investors' concerns about policy uncertainty. It should be noted that retail sales data mainly reflect purchases of goods, accounting for about one-third of consumer spending, while overall consumption data including services will need to wait for the inflation-adjusted expenditure report for June to be released later this month in order to fully present. This upcoming report will more comprehensively reflect changes in consumers' actual purchasing power, providing a key basis for judging economic trends.