- POSTED: 13 Aug 2014 21:56
- UPDATED: 13 Aug 2014 21:57
US retail sales stalled in July after five months of gains, as consumers pulled back spending on autos and general goods, the Commerce Department said on Wednesday (Aug 13).
WASHINGTON: US retail sales stalled in July after five months of gains, as consumers pulled back spending on autos and general goods, the Commerce Department said on Wednesday (Aug 13). Retail sales were virtually unchanged in July from the prior month, surprising analysts who had forecast an increase of 0.3 per cent. Retail sales rose 0.2 per cent in June.
Excluding the automobile sector, sales edged up 0.1 per cent, slowing sharply from a 0.4 per cent rise in June and missing estimates of a 0.3 per cent gain. The slowdown in retail sales, a component of US consumer spending that accounts for about two-thirds of the nation's output, highlighted the fragile economy where wage growth is minimal and unemployment, though easing, remains high.
Sales of autos and motor vehicle parts continued to slip, down 0.2 per cent last month after falling 0.3 per cent in June. Sales at general merchandise stores dropped 0.5 per cent, with department stores taking a bigger 0.7 per cent decline. Even non-store retailers like online stores felt the slam of wallets closing, with sales dipping 0.1 per cent.
Year-over-year, July retail sales were up 3.7 per cent. The report was "a bit disappointing but the trend is okay and August should be better," said Ian Shepherdson of Pantheon Macroeconomics.
Shepherdson noted that retail sales minus autos, gasoline and food rose at a "decent" annual rate of 6.2 per cent in the three months to July, compared with the previous three months, but were now set to slow. "Consumers just don't have the cash flow to finance sustained gains above 4.0 per cent," he said.