U.S. retail sales were unexpectedly flat 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 per cent 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 polled by Reuters had forecast retail sales, which account for a third of consumer spending, increasing 0.2 per cent last month.
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 per cent in July. That suggested a moderation in consumer spending early in the third quarter.
Core sales rose by a revised 0.5 per cent in June. They were previously reported to have increased 0.6 per cent and economists had expected them to advance 0.4 per cent in July.
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 per cent annualized rate.
Receipts at auto dealerships fell 0.2 per cent in July after declining 0.3 per cent the prior month. Sales at non-store retailers, which include online sales, slipped 0.1 per cent.
Sales at clothing retailers rose 0.4 per cent and receipts at sporting goods shops gained 0.2 per cent.
Sales at electronics and appliances stores fell 0.1 per cent, while receipts at building materials and garden equipment suppliers rose 0.2 per cent.
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