June’s retail sales matched the +0.4% pace for monthly gains seen in both April and May, helping to boost yearly gains to +3.4%. Online retailers led with a +1.7% increase, followed by restaurants/bars (+0.9%), and automobile dealers (+0.7%), but falling prices dropped gas station sales by -2.8%, and excluding the effect of falling gas prices brought sales up +0.7% for the month. Department store sales dropped -1.1% for the month and led yearly losses at a -5.2% yearly decline, followed by yearly losses for electronics/appliances (-5.0%) and sporting goods/hobby stores (-3.3%). Yearly sales increased the most for online retailers (+13.4%), health/personal care (+5.5%), automobiles (+4.1%), and restaurants/bars (+4.0%).

Milder weather in June reduced demand for utilities, leading to a -3.6% monthly production drop, but this was offset by increases of +0.2% for mining and +0.4% for manufacturing, leaving overall industrial production unchanged from May. On a yearly basis, industrial production was up +1.3% overall, with gains of +8.7% for mining and +0.4% for manufacturing, and a -2.6% yearly drop for utilities. Mining capacity was stretched the most at +91.5% utilization and +7.2% growth for the year, well past it’s long term average of 87.1%. Manufacturing capacity grew +1.2% for the year, and utilization rose to +75.9%, but remained below its 78.3% average. Reduced demand for utilities also dropped their utilization rate by ‑3.0% in June to 74.6%, well below their 85.4% average.

The Federal Reserve’s Beige Book summary of economic activity found that overall expansion continued at a modest page from mid-May through early June, and despite widespread concerns over tariffs and trade-related uncertainties, modest growth was expected to continue and the outlook was generally positive for the near future. The employment market remained tight, and there were reports of difficulties in filling open positions, with employers in most districts expanding benefits packages to try to attract workers. Higher tariffs and labor costs increased input prices, but brisk competition limited the ability for firms to pass on cost increases in final product pricing. Lower demand dropped prices for steel and lumber, and professional and business service prices dropped as well, but transportation costs varied by district.