WASHINGTON (AP) – U.S. retail sales rose in July by the largest amount in five months, buoyed by more spending on autos, furniture and clothing.

The Commerce Department said Tuesday that retail sales rose 0.8% in July from June. The increase followed three months of declines, including a 0.7% drop in sales in June.

The retail sales report is the government’s first look each month at consumer spending, which drives roughly 70% of economic activity.

All major categories showed increases, a sign that consumers may be gaining confidence after the longest stretch of declines since the fall of 2008.

In a separate report out Tuesday, the government said U.S. wholesale prices increased in July from June, pulled up by higher costs for cars and light trucks and a 34.5% increase in corn prices — biggest one-month jump since October 2006.

The Labor Department said the producer price index, which measures price changes before they reach the consumer, increased a seasonally adjusted 0.3% last month. That followed a 0.1% gain in June.

In July, car prices at the wholesale level rose 1.1%. Light truck prices increased 1.6% — the largest gain since November 2009.

Wholesale food prices rose 0.5% last month, a sign that the severe drought in the Midwest is driving costs higher. The dry weather has harmed a range of crops, most notably corn and soybeans.

The increase in corn prices could affect food prices in the coming months. Corn is used to make everything from cosmetics to cereal, soda, cake mixes and candy bars. It is also used as a feed for cattle and hogs. Pork, beef and veal prices also increased sharply in July.

The U.S. Agriculture Department said Friday that the U.S. corn harvest will fall to its lowest level in five years this year because of the drought.

Wholesale energy prices fell 0.4% in July, the first straight monthly decline. Oil and gas costs have increased recently and will probably affect August’s data.

Gas prices are also starting to move back up. The nationwide price for a gallon of gas averaged $3.67 on Friday, up 11 cents in just the past week and almost 30 cents higher than a month ago.

Excluding recent spikes in gas prices, tame inflation is helping consumers feel a bit wealthier. Retail sales, excluding gasoline station sales, were up 0.8%, same as the overall increase. On a seasonally adjusted basis, retail sales totaled $403.9 billion in July, up 21.4% from the recession low hit in March 2009.

Gains in consumer spending add to a picture of a modestly improving economy in July. Employers added 163,000 jobs, the best month for job growth since February. And consumer confidence rose for the first time in five months.

However, a number of forces continue to hold back economic gains. Job growth hasn’t been enough to push down the unemployment rate. It ticked up to 8.3% last month, the same level it was at the beginning of the year. And income has barely increased in the past 12 months, keeping budgets tight for those Americans who have jobs.

Overall, consumer spending on goods and services grew just 1.5% in the April-June quarter, the slowest pace in a year. And the uneven performance of the economy appears to be increasing anxiety in the workplace and at home. One sign of that is that Americans are saving more. The savings rate — the percentage of after-tax income that consumers don’t spend — rose to 4.4% in June, highest in a year.

Still, at least one economic indicator should continue to trend in consumers’ favor: low inflation. Wholesale prices increased only 0.5% in the 12 months that ended in July. That’s the lowest since October 2009.

Excluding food and energy costs, prices increased 2.5% in the 12 months that ended in July, the smallest year-over-year gain since June 2011. In July, wholesale prices, excluding food and gas costs, which tend to jump around month to month, rose 0.4%.

Low inflation means the money that consumers have to spend buys more, which can help the economy. It also gives the Federal Reserve more leeway to keep interest rates low, which usually spurs economic growth. If prices began to rise rapidly, the Fed likely would be forced to raise rates in response.