U.S. retail sales rebounded more than expected in June, suggesting a modest improvement in economic activity and giving the Federal Reserve cover to delay cutting interest rates while it gauges the inflation fallout from import tariffs.

June retail sales data will give investors a look at how tariff-fueled inflation is shaping consumer spending.

Consumers picked up their spending in June after an earlier pullback, despite anxiety over tariffs and the state of the U.S. economy. Retail sales rose a better-than-expected 0.6% in June, the Commerce Department said Thursday,

Sales at retailers rebounded in June after the White House dialed back high U.S. tariffs, as consumers temporarily shrugged off the trade wars and spent more on cars, clothes, do-it-yourself projects and dining out.

The UK economy is showing more signs of rebounding from its recent slump, with a jump in June retail sales adding to evidence of a strong pick-up in activity seen in other leading indicators.

The CNBC/NRF report’s calculation of Core Retail Sales, excluding restaurants, auto dealers and gas stations, was down 0.32 percent m/m in June but up 3.4 percent y/y. That compares with increases of 0.23 percent m/m and 4.2 percent y/y in May, and increases of 0.9 percent m/m and 7.1 percent y/y in April.