U.S. retail sales unexpectedly stalled in July,
pointing to some loss of momentum in the economy early in the third
quarter. The Commerce Department said on Wednesday retail sales,
which had increased 0.2 percent in June, were held back by a second straight
month of declines in receipts at auto dealers, as well as weak sales of
furniture and electronics and appliances.
July's reading was the weakest since January. Economists had
forecast retail sales, which account for a third of consumer spending,
increasing 0.2 percent last month. The weak sales report, which is at odds with
data on employment, manufacturing and services sectors that have suggested the economy was
growing solidly, could see the Federal Reserve in no rush to start raising
The U.S. central bank has kept its benchmark overnight
interest rate near zero since December 2008, citing weak wage growth among
other concerns. The dollar extended losses against the euro on the data, while
prices for U.S. Treasury debt pared losses. U.S. stock index futures were
trading slightly up.
So-called core sales, which strip out automobiles, gasoline,
building materials and food services, and correspond most closely with the
consumer spending component of gross domestic product, edged up 0.1 percent in
That suggested a moderation in consumer spending early in
the third quarter. Sluggish wage growth is likely constraining retail sales.
Core sales rose 0.5 percent in June. The retail sales
report, which was generally weak, suggested third-quarter growth will probably
pull back after the April-June quarter's brisk 4.0 percent annualized rate.
Receipts at auto dealerships fell 0.2 percent in July after
declining 0.3 percent the prior month. Sales at non-store retailers, which
include online sales, slipped 0.1 percent.
Sales at clothing retailers rose 0.4 percent and receipts at
sporting goods shops gained 0.2 percent. Sales at electronics and appliances stores
fell 0.1 percent, while receipts at building materials and garden equipment
suppliers rose 0.2 percent.
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