US retail sales increased less than expected in June as receipts at car dealerships surprisingly fell.

However, the details of the retail sales report suggested the economy was on a solid footing at the end of the second quarter.

The Commerce Department said retail sales rose 0.2% last month after an upwardly revised 0.5% advance in May.

Economists polled by Reuters had forecast retail sales, which account for a third of consumer spending, rising 0.6% after a previously reported 0.3% gain in May.
So-called core sales, which strip out cars, petrol, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, increased by a solid 0.6% in June.          

Core sales rose by a revised 0.2% in May. They were previously reported as being flat and economists had expected them to rise 0.5% in June.

Despite the below-expectations rise in overall sales, June's retail sales report was the latest sign of the economy's strengthening fundamentals, which could buoy optimism the recovery is on a self-sustaining path.

From employment to manufacturing, the economy appears to be firing on nearly all cylinders with even housing appearing to be regaining its footing after slumping in late 2013 following a run-up in mortgage rates. Growth estimates for the second-quarter top a 3.0% annual rate.

Overall retail sales last month were held back by a 0.3% fall in receipts at car dealerships. The decline is surprising given that car makers reported a surge in motor vehicle sales in June. Car sales had increased 0.8% in May.