Retail sales that measure change in the total value of sales at the retail level dropped in June to – 0.3 percent against 0.2 percent expected by economists. Purchases increased in May by 1.2 percent from April 0.0 percent that was 0.3 percent smaller than expected.
The May surge in consumer spending was quickly attributed to Memorial Day holiday and the reason for the subdued performance for the second quarter. It is most likely that stronger gains in incomes will be needed to boost consumer spending because it accounts for almost 70% of the economy.
Tuesday report also showed that the cost of goods bought from abroad dropped 0.1 percent last month after advancing 1.2 percent in May. The import-price index declined. A separate report shows that all prices excluding fuels fell 0.2 percent last month.
Cars and trucks reportedly sold at a 17.1 million annualized rate in June, a decline from a 17.7 million pace in May. Auto sales in 2015 have averaged a 16.8 million rate compared to last year’s 16.4 million. That is the strongest quarter since 2007.
Core Retail Sales that measure the change in the total value of sales at the retail level excluding automobiles declined from 0.8 percent to -0.1 percent while economists anticipated 0.7 percent.
According to Bloomberg in May and June retail sales climbed 0.15 percent excluding Autos and gasoline which matched the average gain of the first quarter of the year. This shows there is little momentum in spending.
Business Inventories fell 0.1 percent from 0.4 percent to 0.3 percent in May, this is the change in the total value of goods held in inventory by manufacturers, wholesalers and retailers. The 0.3 percent is expected by analysts due to the Memorial Day holiday.