The cash registers at U.S. retailers rang a little more in June. A number of retailers including Gap Inc. (NYSE: GPS), Macy’s (NYSE: M) and Target Corp. (NYSE: TGT) reported better-than-expected June results.
Analysts say lower gasoline prices and pumped up promotions at retailers were at play.
Standard & Poor’s Marie Driscoll explains:
“I think retailers benefited from very promotional pricing, clearance modes, semi-annual sales at a number of retailers as they prepare for July and back to school and fall selling. But I think also the consumer wasn’t there in May and they came back in June.”
Also showing signs of coming back: jobs. Private employers hired four times more workers in June than in May according to payroll processor Automatic Data Processing, Inc. (Nasdaq: ADP).
Most of the jobs came from small businesses. And while jobless claims remain high- a drop in new claims is also a good sign more Americans are getting to work.
David Resler is the Chief U.S. economist at Nomura Securities International says:
“It should relieve some of the anxiety that people were starting to feel about the so called soft patch that we’ve been in for the last couple of months or even the last two quarters. It looks to us like we’ll have back to back quarters of GDP growth of less than 2% but we think we are setting the stage for a significantly faster growth in the second half of this year.”
That optimism is carrying through to expectations for Friday’s jobs report, which economists surveyed by Reuters expect will show a much bigger jump than in May, but for the unemployment rate to hold at 9.1%.
Bottom line: Encouraging reports from U.S. retailers show consumers may be starting to spend as new reports on the job market point to a possible rebound there.