Retail Purchases in U.S. Unexpectedly Decreased 0.5% in June Amid Job Pessimism [View all]
Retail sales in the U.S. unexpectedly declined for a third straight month in June, a sign limited employment gains are taking a toll on the biggest part of the economy.
The 0.5 percent drop followed a 0.2 percent decrease in May, Commerce Department figures showed today in Washington. The decline was worse than the most-pessimistic forecast in a Bloomberg News survey in which the median projection called for a 0.2 percent rise. Purchases last fell for three or more months in July through December 2008.
A weakening job market is sapping households of the confidence and income gains needed to boost expenditures, which account for about 70 percent of the economy. Without gains in spending at retailers such as Target Corp. and Macy’s Inc. (M), the expansion will have a difficult time gaining momentum.
“People are just pulling back, and you’re not likely to see a significant pickup from here,” said Michael Carey, chief economist for North America at Credit Agricole CIB in New York. “This was certainly a slowdown from the first quarter.”