Retail sales drop for first time in 5 months
Washington—Retail sales fell in July, the weakest performance in five months, as shoppers shunned autos and other big ticket items.
The Commerce Department reported Wednesday that retail sales dipped 0.1 percent last month when a variety of economic woes combined to blunt the impact of billions of dollars in government stimulus payments to U.S. households.
It was the first decline since sales had fallen by 0.5 percent in February and it was a worse showing than the flat reading economists had been expecting. The new report did revise higher the estimate for June, showing sales rose by 0.3 percent that month rather than the 0.1 percent initial reading.
The weakness in July came after another big slide in auto sales as Detroit faced its worst sales month in 16 years. Automakers have been battered by the weak economy and record gasoline prices which have cut into demand for their once-popular sport utility vehicles and pickup trucks.
The White House noted that overall sales had been heavily influenced by the big drop in auto sales and what presidential spokesman Tony Fratto called “substantial headwinds faced by households.” Fratto said that the weakness in July was occurring at a time when gasoline pump prices were peaking at more than $4 per gallon.
Excluding the big drop in autos, retail sales would have posted a 0.4 percent increase. While that was a positive reading, it was still the weakest showing for sales excluding autos in five months.
