US retail sales rebounded more than expected in July, providing a welcome boost to an economy concerned about ongoing woes in the mortgage market. In June, the retail sales unexpectedly dropped by 0.9 per cent, the biggest decline in almost two years.
Overall sales at US retailers rose 0.3 per cent last month, compared with June’s 0.9 per cent drop, and better than the expected 0.2 per cent rise, said the commerce department. Retail sales account for more than two-thirds of the US economy.
Higher interest rates have weighed on the property market and in particular on the so-called sub-prime mortgage sector, which specialises in high-risk, higher-interest loans to people with a poor credit history or low wages. As interest rates have risen, a growing number of sub-prime lenders have defaulted on their payments, leading to record numbers of home repossessions.
