U.S. Retail Sales Fell Unexpectedly In June

July 13, 2007
Auto dealerships saw sales decline 3.1% in June.

As American consumers cut back their spending amid a persistent housing slump and higher gasoline cost, U.S. retail sales fell in June according to the Commerce Department. Sales declined 0.9%, defying most Wall Street analysts' forecasts that sales would remain unchanged.

Stripping out vehicle sales from the June report, retail sales dropped 0.4%.

The decline in retail sales is likely to disappoint the Federal Reserve which is banking on improved economic growth after U.S. growth slowed to 0.7% in the first three months of the year. Wall Street analysts track retail sales closely because consumer spending accounts for some two-thirds of all economic growth. A sustained decline in retail sales and consumer activity could dent growth going forward. The Fed has kept its key short-term fed funds interest rate anchored at 5.25% for a year as it focused on warding off inflationary pressures.

The latest retail sales snapshot also revealed that auto dealerships across the country saw their sales decline 3% in June after sales rose 1% in May. Service station sales fell 1.1% last month, amid strong spikes in gasoline costs, after rising 4.1% in the prior month.

Over the past 12 months, overall retail sales to June are up 3.8% or 4.2% excluding the auto sector.

Copyright Agence France-Presse, 2007

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2024. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!