Retail sales declined by 0.5% in June, following declines in May and April as more consumers cut spending on goods and services, the U.S. Department of Commerce reported.
The biggest decline in sales occurred at gas stations, which is a good thing for consumers, bad for the fueling industry. Sales in this category fell 1.8%. However spending fell sharply at most other stores, indicating that consumers have preferred to save money.
The only retailers that reported high sales were clothing outlets, grocery stores, liquor stores and Internet sites such as Amazon, yet these increases were small.
The U.S. has not experienced a three-month decline in sales and spending since 2008, halfway through the Great Recession. Actual sales and spending failed to meet economists’ expectations, who had forecasted a 0.2% increase in sales.
“The soft patch in the U.S. economy looks just a bit softer after today’s news,” said economist Avery Shenfeld at CIBC World Markets.
Retail spending accounts for more than two-thirds of the nation’s economic growth. With weak retail sales, the U.S. economy is not likely to expand at a fast rate. The U.S. unemployment problem also won’t be resolved if consumer spending stays down.