WASHINGTON: US retail sales stalled in July after five months of gains, as consumers pulled back spending on autos and general goods, the Commerce Department said Wednesday.
Retail sales were virtually unchanged in July from the prior month, surprising analysts who had forecast an increase of 0.3 percent. Retail sales rose 0.2 percent in June.
Excluding the automobile sector, sales edged up 0.1 percent, slowing sharply from a 0.4 percent rise in June and missing estimates of a 0.3 percent gain.
The slowdown in retail sales, a component of US consumer spending that accounts for about two-thirds of the nation's output, highlighted the fragile economy where wage growth is minimal and unemployment, though easing, remains high.
Sales of autos and motor vehicle parts continued to slip, down 0.2 percent last month after falling 0.3 percent in June.
Sales at general merchandise stores dropped 0.5 percent, with department stores taking a bigger 0.7 percent decline.
Even non-store retailers like online stores felt the slam of wallets closing, with sales dipping 0.1 percent.
Year-over-year, July retail sales were up 3.7 percent.
The report was "a bit disappointing but the trend is okay and August should be better," said Ian Shepherdson of Pantheon Macroeconomics.
Shepherdson noted that retail sales minus autos, gasoline and food rose at a "decent" annual rate of 6.2 percent in the three months to July, compared with the previous three months, but were now set to slow.
"Consumers just don't have the cash flow to finance sustained gains above 4.0 percent," he said.
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