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Reuters Edge

INSTANT VIEW 4-July retail sales rise 0.3 pct

NEW YORK (Reuters) - Sales at U.S. retailers rose a slightly more-than-expected 0.3 percent in July and they were even stronger once car and gasoline sales were stripped out, Commerce Department data showed on Monday.

Excluding autos, retail sales gained 0.4 percent in July as forecast and the prior month was revised to a 0.2 percent decline versus a 0.4 percent fall initially reported.

Economists polled by Reuters forecast overall retail sales to rise 0.2 percent compared with a revised 0.7 percent drop in June, previously reported as a 0.9 percent drop.

COMMENTS:

STEPHEN GALLAGHER, CHIEF U.S. ECONOMIST, SOCIETE GENERALE, NEW

YORK:

“It looks to me like a moderately healthy report. It is very much in line with the Fed’s expectations that the economy will have a moderate pace of growth during the second half of the year. It is not strong -- it is not going to dampen all of our fears. Our fears have only grown, not dampened, given all the turmoil in the financial markets but I think we are still getting some healthy news on the consumer and I think it is very much in line with the jump in consumer confidence in July.”

DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL

RESEARCH, SHREWSBURY, NEW JERSEY:

“I think really everything revolves around the Fed and what they are doing. People mentioned retail sales and that it was stronger than expected and everyone is focused on what its effect is on the Federal Reserve in terms of actions.”

KURT KARL, CHIEF U.S. ECONOMIST, SWISS RE, NEW YORK:

“It’s not very strong year-over-year or month-over-month, but it’s still positive. Gasoline is down with prices softer in July versus June, which helps non-gasoline goods.

“The core housing things remain a damper. They are just spending on non-home related goods like clothing.

“There will a small upward in second quarter GDP and we are getting a smaller upward lift in July, which would help the third quarter.”

SCOTT WREN, SENIOR EQUITY STRATEGIST, A.G. EDWARDS & SONS INC.,

ST. LOUIS:

“Once again, you keep hearing the consumer is going to collapse. Our argument in this kind of employment market, where you have unemployment this low, you’re going to see people out there spending money. For us, granted same-store sales last week, those numbers were not all that great, but most spending is skewed towards the upper end of the income scale and I don’t think higher energy prices at this level are really going to do some damage ... Employment remains pretty darn strong. I think some decent retail sales numbers are what you should expect.”

SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR &

ASSOCIATES, TORONTO, CANADA:

“The retail sales data could be lending support, but the key issue remains the issue of credit. There were some signs last week that U.S. retail sales wouldn’t be as bad as people were fearing.

“I still believe the U.S. consumer is still going to be much more cautious than before. I’m still underweight discretionary stocks.”

RICHARD HUBER, ECONOMIST, A.G. EDWARDS AND SONS, ST. LOUIS,

MISSOURI:

“Not only did the month of July come in a little stronger than expected, but June was revised upward to reflect less of a decline which will be good for the stock market.”

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