Amer­i­cans cut re­tail spend­ing for sec­ond month

The Denver Post - - BUSINESS -

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.

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