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Salesman Kevin Davis, right, walks with customers Tory Borek, center, and Laura Nordin past Ford pick-up trucks on the dealership lot at Capital Ford in Raleigh, North Carolina, U.S., in this file photo.

Jim R. Bounds/Bloomberg

U.S. retail sales fell for a third straight month in June as demand slumped for everything from cars and electronics to building materials, a sign the economic recovery is flagging.

Retail sales slipped 0.5 per cent, the Commerce Department said on Monday.

It was the first time sales had dropped in three consecutive months since late 2008, when the economy was still mired in a deep recession. Analysts polled by Reuters had expected retail sales to rise 0.2 per cent.

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The report adds to a spate of weak economic data that is raising pressure on President Barack Obama ahead of his November reelection bid. Republican challenger Mitt Romney is focusing his campaign on the weak economy that has plagued Obama's presidency.

The report could raise hopes that the Federal Reserve could launch another bond-buying program to help the economy.

Job creation in the United States has slowed dramatically in the last few months, and recently the country's factory sector also showed signs of contraction.

The retail data is particularly worrisome because it suggests consumer spending, which drives about two-thirds of the economy, is also sagging.

Sales of motor vehicles and parts dropped 0.6 per cent last month. Receipts at electronics and appliance stores declined 0.8 per cent. Sales of building materials slipped 1.6 per cent, while receipts as gasoline stations dropped 1.8 per cent.

Excluding autos, sales fell 0.4 per cent.

A so-called core measure of retail sales, which excludes autos, gasoline and building materials, dropped 0.1 per cent.

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