US Retail Sales Declined 0.3% in June, Hurting Business Sentiment
The US retail sales in June have dropped by 0.3 percent, tainting the future prospects of the economy. The decline in sales has tarnished the hopes of the business retailers who expected a rise in spending by consumers in the second quarter.
The Commerce Department statistics revealed on Tuesday that the retail sales unexpectedly declined 0.3 percent after a 1 percent May advance.
A report from the National Federation of Independent Business states that the drop in sales has hurt the small- business optimism which suffered its biggest setback since November 2012.
Commerce Department’s report showed declines in sales of eight of 13 major retail categories. It has been reported that the sales fell at clothing stores, furniture outlets and auto dealers after gains during the previous month.
The report revealed that the sales at automobile dealers dropped 1.1 percent after a 1.8 percent gain last month. Further, the report showed that the retail sales excluding autos fell 0.1 percent after a 0.8 percent increase in May.
Following the release of the Commerce Department figures of June retail sales, the economists at JPMorgan Chase & Co., TD Securities LLC and Credit Suisse, have all marked down their tracking estimates for second-quarter growth by 0.2 percentage point.
Stephen Stanley, chief economist at Stamford, Connecticut-based Amherst Pierpont Securities LLC, had projected that the June retail sales would be unchanged from the prior month. Stanley stated,” It puts a little cold water on the idea that the consumer was gathering momentum. I don’t think it fundamentally changes the picture for the Fed”.
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