Brazil retail sales surprise on the upside as govt measures spur consumer confidence

Retail sales in Brazil surprised markets on the upside as recent government measures laid out by Acting President Michel Temer’s administration helped fuel consumer confidence in the country.

Sales rose 0.1 percent in June after a revised 0.9 percent drop the prior month, data released by the government statistics agency IBGE showed Tuesday. The number surprised economists whose median forecast was for a 0.4 percent drop. Only five of the 34 economists surveyed by Bloomberg expected growth in June.

Moreover, sales of food, beverages and tobacco products at hypermarkets and supermarkets fell 0.4 percent in June, after a revised 0.1 percent growth a month earlier. Apparel sales grew 0.7 percent, marking their third straight month of increase.

Further, broad retail sales, which include cars, car parts, and construction materials, fell 0.2 percent from May, and 8.4 percent versus June last year, according to the statistics institute. Sales plunged 5.3 percent versus the same month during a year ago period.

The industrial sector of Latin America’s largest economy has been rising for months but retail has struggled to regain momentum as shoppers face rising unemployment and borrowing costs that remain at their highest in almost a decade. June’s surprise increase was the third positive data in six months, Bloomberg reported.

Meanwhile, the country’s retail sector has remained volatile in 2016 so far, a sign that recession still continues to remain a drag on consumer appetite.