Weak Retail Sales Hint at Slower Economic Growth
S. retail sales unexpectedly fell in June as households cut back on purchases of automobiles and a range of other goods, which could raise concerns the economy was slowing again.
Tuesday's weak retail sales report, together with signs of some softening of the labor market, could dampen expectations for an interest rate hike from the Federal Reserve this year, which most economists expect could come in September.
The underlying tone of this report suggests that the recovery is beginning to show some signs of strain.
"The underlying tone of this report suggests that the recovery is beginning to show some signs of strain. If anything it will temper, at the margin, any consideration for a September rate hike," said Millan Mulraine, deputy chief economist at TD Securities in New York.
The Commerce Department said retail sales slipped 0.3 percent, the weakest reading since February, after May's downwardly revised 1 percent increase.
Retail sales excluding automobiles, gasoline, building materials and food services slipped 0.1 percent following a 0.7 percent gain in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
