Americans cut retail spending for second month
Americans curtailed their shopping in June, with less spending at restaurants, department stores and gasoline stations. The spending pullback came despite a healthy job market and suggests that economic growth could remain sluggish.
Retail sales fell 0.2 percent after declining 0.1 percent in May, the Commerce Department said Friday. Spending at retailers has grown 2.8 percent over the past 12 months, a relatively modest pace given that the figures aren’t adjusted for inflation.
Michael Dolega, a senior economist at TD Bank, called the report “a disappointment as far as the resilience of the consumer is concerned.”
The rise of online shopping has left more retailers competing on price or striving to offer deeper discounts — factors that can limit overall sales figures.
Even former sources of strength in retail, like restaurants and auto dealers, have faced weakening sales in recent months.
Consumers account for roughly 70 percent of U.S. economic activity.
The economy has expanded at a tepid annual pace of roughly 2 percent since the Great Recession ended eight years ago. President Donald Trump has pledged to elevate that rate above 3 percent. But it’s doubtful he can do so without a jolt in retail spending.
Sales slipped 0.6 percent at restaurants and bars in June. They fell 0.7 percent at department stores and 1.3 percent at service stations, likely because of lower gasoline prices. But not all sectors suffered declines in June. Spending improved 0.4 percent at non-store retailers, a category that includes online outlets. Building materials stores enjoyed a 0.5 percent increase in sales. Auto dealers and furniture stores also reported slight gains of 0.1 percent.