The Commerce Department released a report on Thursday showing retail sales in the U.S. increased by much more than expected in the month of July, partly reflecting the impact of online retail giant Amazon's (AMZN) Prime Day promotion. The report said retail sales climbed by 0.7 percent in July after rising by a revised 0.3 percent in June. Economists had expected retail sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month. The stronger than expected retail sales growth came despite a pullback in sales by motor vehicle and parts dealers, which slid by 0.6 percent in July after climbing by 0.3 percent in June. Excluding the drop in auto sales, retail sales surged up by 1.0 percent in July following a revised 0.3 percent increase in June. Ex-auto sales had been expected to climb by 0.4 percent, matching the growth originally reported for the previous month. The jump in ex-auto sales partly reflected a 2.8 percent spike in sales by non-store retailers amid Amazon’s Prime Day sales. Sales by gas stations, department stores and food service and drinking places also showed significant increases during the month. Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, also surged up by 1.0 percent in July after climbing by 0.7 percent in June. "The continued surge in retail sales in July was probably flattered by Amazon Prime Day spending and a rise in gasoline prices last month," said Michael Pearce, Senior U.S. Economist at Capital Economics. He added, "Nevertheless, there's no denying that consumption growth remains strong, which should prevent the weakness in manufacturing and business investment from dragging the economy into recession any time soon."