US retail sales dip signals slow recovery
By Martin Crutsinger |
July 15, 2010, Thursday
|
Print Edition
Print Edition
RETAIL sales in the United States fell in June for the second straight month, more evidence that the US economic recovery will slow in the second half of the year.
Retail spending dropped 0.5 percent in June, the Commerce Department reported yesterday. That followed a 1.1 percent fall in May. Excluding autos, spending fell 0.1 percent in June.
Much of the weakness last month came from a drop in auto sales and a decline in gasoline prices. Excluding autos and gasoline, sales would have risen 0.1 percent in June after having plunged 1 percent in May.
Americans are spending less and that could threaten the pace of the recovery. Consumer spending accounts for 70 percent of economic activity.
But consumers have held back because of high unemployment and other signs that have dampened their confidence, such as the volatile stock market and a struggling housing market.
"June's retail sales figures add to the growing batch of evidence suggesting that the economic recovery shifted into a lower gear towards the end of the second quarter," Paul Dales, US economist at Capital Economics, wrote. "Activity at the end of the quarter was much weaker than at the beginning."
He said he was not looking for the economy to slip back into recession, but he said that overall economic growth is likely to be disappointing for the rest of this year and into 2011.
The June decline in retail sales was larger than the 0.2 percent fall that economists had expected.
The overall number was dragged down by a 2.3 percent plunge in auto sales, the biggest monthly drop since auto sales declined 2.5 percent in February.
Also, falling fuel prices pulled down sales at gasoline stations by 2 percent.
Some industries showed signs of strength in June. Department stores sales posted a 1.1 percent gain. The larger category of general merchandise stores, which includes big retailers such as Wal-Mart, posted a 0.2 percent increase, but that followed a 1 percent drop in May.
Sales at speciality clothing stores rose 0.6 percent in June. Sales at appliance stores gained 1.3 percent. Sales at hardware stores declined 1 percent.
Retail spending dropped 0.5 percent in June, the Commerce Department reported yesterday. That followed a 1.1 percent fall in May. Excluding autos, spending fell 0.1 percent in June.
Much of the weakness last month came from a drop in auto sales and a decline in gasoline prices. Excluding autos and gasoline, sales would have risen 0.1 percent in June after having plunged 1 percent in May.
Americans are spending less and that could threaten the pace of the recovery. Consumer spending accounts for 70 percent of economic activity.
But consumers have held back because of high unemployment and other signs that have dampened their confidence, such as the volatile stock market and a struggling housing market.
"June's retail sales figures add to the growing batch of evidence suggesting that the economic recovery shifted into a lower gear towards the end of the second quarter," Paul Dales, US economist at Capital Economics, wrote. "Activity at the end of the quarter was much weaker than at the beginning."
He said he was not looking for the economy to slip back into recession, but he said that overall economic growth is likely to be disappointing for the rest of this year and into 2011.
The June decline in retail sales was larger than the 0.2 percent fall that economists had expected.
The overall number was dragged down by a 2.3 percent plunge in auto sales, the biggest monthly drop since auto sales declined 2.5 percent in February.
Also, falling fuel prices pulled down sales at gasoline stations by 2 percent.
Some industries showed signs of strength in June. Department stores sales posted a 1.1 percent gain. The larger category of general merchandise stores, which includes big retailers such as Wal-Mart, posted a 0.2 percent increase, but that followed a 1 percent drop in May.
Sales at speciality clothing stores rose 0.6 percent in June. Sales at appliance stores gained 1.3 percent. Sales at hardware stores declined 1 percent.
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