Core retail sales fall for first time in a year in June
Retail sales were mixed in June, buoyed by strong auto and furniture sales but tamped down by high unemployment and taxes, analysts said.
The overall gauge of sales rose 0.4% from May following a revised 0.5% increase the previous month, according to the Commerce Department. The measure increased 5.7% compared with June 2012.
But Wall Street had expected a 0.8% boost, according to Credit Suisse. And a calculation of so-called core sales, which strip out the effects of auto and gas purchases, slipped 0.1% in its first decline in a year.
Credit Suisse analysts called retailers’ performance “disappointing.”
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June benefited from strength in several sectors. Consumers rushed to buy cars and trucks, causing a 2.1% surge in auto purchases. They also began sprucing up their home interiors with furniture, sending sales up 2.4% after the category declined 0.4% the previous month.
Clothing stores, which had also suffered from a slow summer start, saw a 0.7% uptick in June.
But shoppers’ goodwill didn’t extend to home improvement brands, which had enjoyed bustling business in May as consumers began to take advantage of warmer weather. In June, sales for the building and garden sector slumped 2.2%.
Wary Americans also eschewed restaurants, whose sales dropped 1.2%, and department stores, where sales were down 1%.
Sales at electronics and appliance stores declined 0.1%.
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It’s a soft start to the summer, said Matthew Shay, chief executive of the National Retail Federation, in a statement.
“Even though healthy home prices and stock values are helping to improve confidence and spending, stagnantly-high unemployment, higher taxes and lingering policy uncertainty continue to keep shoppers and economic growth at bay,” Shay said. “The recovery is solid and good but its pace remains measured and modest.”
Jack Kleinhenz, chief economist for the trade group, added that retail sales “will remain reserved for the foreseeable future.”
“U.S. households have adjusted their spending to a slow-growth economy,” he said. “With employment and consumer confidence improving, we expect that the second half will be better than the first.”
Three other retail sales reports last week, which measure roughly a dozen chain retailers, were more optimistic.
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