Americans stepped up their spending at retailers last month by the most in a year and a half, easing concerns that the economy might be weakening under the pressure of higher prices and elevated interest rates. The Commerce Department reported Thursday that retail sales jumped 1% from June to July, the biggest such increase since January 2023, after having declined slightly the previous month. Auto dealers, electronics and appliance stores and grocery stores all reported strong sales gains. The July retail sales data provided reassurance that the U.S. economy, while slowing under the pressure of high interest rates, remains resilient. It showed that America’s consumers, the primary driver of economic growth, are still willing to spend. The prospect of a still-growing economy is likely to be promoted by Vice President Kamala Harris’ presidential campaign, which is preparing to roll out policies Friday to ban “price gouging” on groceries. On Wednesday, her opponent, former President Donald Trump slammed the economic record of the Biden-Harris administration, though he wildly inflated cost increases on food and monthly mortgage payments. Other economic data released Thursday was also mostly positive, including a report on first-time applications for unemployment benefits. The figures show that businesses are mainly holding onto their workers and not increasing layoffs. With Americans spending more, economists at Morgan Stanley have boosted their forecast for growth in the July-September quarter to a 2.3% annual rate, from an earlier estimate of 2.1%. The economy expanded at a healthy 2.8% rate in the April-June quarter. All told, the latest data is consistent with an economy that is headed toward a “soft landing,” in which the Federal Reserve raises interest rates enough to cool inflation but not so much as to cause a recession. “The ongoing resilience of consumer spending should ease recession fears and reduce the odds markets have placed on a larger (half-point) cut” at the Fed’s meeting in mid-September, said Michael Pearce, an economist at Oxford Economics. Instead, economists increasingly expect the Fed to begin cutting interest rates next month with a modest quarter-point reduction in its key rate, which affects many consumer and business loans. Adjusted for inflation, sales rose about 0.8% last month. And excluding gas station sales, which don’t reflect Americans’ appetite to spend, retail purchases also rose 1%. Consumers have been pummeled since the pandemic by high prices and elevated interest rates. Yet at the same time, average wages have also been rising, providing many households with the means to keep spending. Inflation-adjusted wages have increased slightly from a year ago. Upper-income households have also seen their wealth increase, with stock prices and home values having jumped in the past three years. Increases in wealth can encourage more spending. Auto sales jumped 3.6% last month, the largest increase since January 2023. It marked a rebound from the previous month, when a cyberattack involving many dealerships slowed sales. Sales at electronics and appliances stores surged 1.6%. And they rose 0.9% at hardware stores and garden centers. Restaurant sales were up 0.3%, a sign that Americans are still willing to spend on discretionary items, such as eating out. Financial markets had plunged earlier this month on fears surrounding the economy after the government reported that hiring was much weaker than expected in July and the unemployment rate rose for a fourth […]