U.S. retail sales edged up in June, as falling gasoline prices limited revenues at gas stations, while bargain-hunting consumers continued to support core spending.

The Commerce Department's Census Bureau said on Thursday that retail sales rose 0.2% last month, after May's data was revised upward to show a 1.0% increase.

Economists polled by Reuters had forecast retail sales, which mostly consist of goods and are not adjusted for inflation, would rise 0.2%, after an initial reading showed a 0.9% increase in May. Estimates ranged from a 0.4% drop to a 1.0% gain.

Data from the U.S. Energy Information Administration showed the average price of gasoline fell to $4.18 per gallon in June, compared with $4.61 in May.

The decline in fuel prices, driven by lower oil prices amid a temporary ceasefire between the United States and Iran, helped free up household budgets for spending in other sectors. However, the collapse of the truce last week and renewed military operations in the Middle East have pushed oil and gasoline prices back up.

In contrast, core retail sales, which exclude automobiles, gasoline, building materials, and food services, rose 0.5% in June, after May's growth was revised to 0.8%. This reading is closely watched as a gauge of consumer spending in gross domestic product, and prior data had shown a 0.7% increase in May.

Amazon's Prime Day event at the end of the month, along with promotional campaigns by rival retailers, likely boosted core sales.

The FIFA World Cup is also believed to have contributed to higher revenues at restaurants and cafes.

Bank of America said in a report on Wednesday that its payment card data showed spending was picking up at discount clothing stores and budget grocery stores since the start of the year, noting that 'more price-sensitive consumers are increasingly turning to general merchandise stores for deals and discounts.'

Tariffs on imports, along with the fallout from the Middle East conflict, continue to pressure household budgets. However, spending remains supported by higher-income households, which have benefited from stock market gains.

The bank added that low-income households have become more inclined to buy cheaper goods, noting that their spending rate at discount clothing stores was five times that of high-income households since the start of 2026.

The Federal Reserve's Beige Book report, released on Wednesday, showed consumer spending rose slightly in early July, with many districts reporting a decline in non-essential spending or a shift toward cheaper alternatives.

Economists expect consumer spending, which accounts for more than two-thirds of the U.S. economy, to regain momentum in the second quarter, after nearly stalling in the first quarter (January-March).

The Atlanta Fed's GDPNow model estimates the U.S. economy growing at an annualized rate of 1.3% in the second quarter (April-June), compared with growth of 2.1% in the first quarter.