Retail sales fall for third straight month
New York -- Retail sales fell 0.5% in June, the Commerce Department said on Monday, as consumer spending declined for the third consecutive month. The drop, which followed a 0.2% decrease in May, was unexpected as many economists were expecting growth.
Falling gas prices were attributed to some of the weakness. But even excluding sales at gas stations, retail spending fell 0.3% in June. Economists said weak job growth was making consumers cautious and eating away at consumer confidence.
“Recent weak jobs data have certainly done nothing to alter our view that consumer spending growth will be very modest at best in the quarters ahead,” said Joshua Shapiro, chief U.S. economist at MFR, in an Associated Press report. “A silver lining in the economic clouds is that lower gasoline prices are helping to cushion the consumer.”
Nine of 13 major retail sales categories tracked in the Commerce Department report showed a decline last month. Sales decreased 0.7% at department stores and declined 1.6% at building supply stores. Sales at furniture stores and electronics and appliance stores both fell 0.8%.
The only bright spot were came food and beverage sales and clothing sales, which edged up 0.1% and 0.2%, respectively.
“Weak economic numbers over the past few weeks have increased anxiety about the future direction of the economy,” said Jack Kleinhenz, chief economist for the National Retail Federation. “Today’s data is discouraging but not demoralizing. If you look at the first half of the year overall, retail sales actually increased 4.6% year-over-year, indicating that the economy is improving but maybe not quick enough to impact consumer spending and job growth.”