Retail Sales Decline 0.3% in June
Purchases decreased 0.3% after a 1% advance in May that was smaller than previously reported, Commerce Department figures showed July 14. The median forecast of 82 economists surveyed by Bloomberg News called for a 0.3% gain. Eight of 13 major retail categories showed declines in demand.
An early Memorial Day holiday that may have boosted sales in May at the expense of last month, and a longer school year caused by the harsh winter probably contributed to the more subdued sales performance for the quarter. Stronger gains in incomes probably will be needed to give consumer spending, which accounts for almost 70% of the economy, a bigger lift heading into the second half of the year.
“The weakness is pretty broad-based, but it does look like categories that you would consider to be seasonal in nature looked to be very weak,” said Stephen Stanley, chief economist at Stamford, Connecticut-based Amherst Pierpont Securities, who projected June retail sales would be unchanged from the prior month. “It puts a little cold water on the idea that the consumer was gathering momentum.”
Another report showed the cost of goods bought abroad dropped in June, restrained by automobiles. The import-price index declined 0.1% last month after advancing 1.2% in May, according to Labor Department figures.
Excluding fuels, prices fell 0.2% last month. The cost of foreign cars decreased 2% over the past year, the biggest 12-month drop in data dating to 1981.
The Commerce Department’s report on sales showed auto dealers, restaurants, furniture and clothing stores were among the retailers that showed declines last month.
While the drop in autos in June was in line with industry data released earlier this month, the industry remains a bright spot.
Cars and light trucks sold at a 17.1 million annualized rate in June, down from a 17.7 million pace in May, figures from Ward’s Automotive Group showed. It capped the strongest quarter since 2005. Auto sales so far in 2015 have averaged a 16.8 million rate, beating last year’s 16.4 million that was the strongest in eight years.
Retail sales excluding autos fell 0.1% after a 0.8% increase in May, the July 14 report showed. They were projected to rise 0.5%, according to the Bloomberg survey median.
Consumers have been pocketing the savings from lower fuel costs. The average cost of a gallon of regular gasoline was $2.77 on July 12, according to AAA, the biggest U.S. auto group. While that’s up from an almost six-year low of $2.03 in January, it’s still far short of last year’s high of $3.70.
