U.S. retail sales tumbled a second straight time in June, falling more than expected in a sign consumer spending is slowing and draining steam from an economy saddled with high joblessness.
Sales decreased 0.5%, the Commerce Department said Wednesday. Economists surveyed by Dow Jones Newswires had forecast a 0.3% decline.
The report was mixed, with some merchants reporting increases and others recording decreases. Excluding auto and gas sales, retail sales rose 0.1%.
The bigger-than-expected drop in the headline number followed an upwardly revised 1.1% drop in May. Originally, May sales were estimated falling 1.2%.
Retail sales provide a pivotal indicator of consumer spending, which makes up much of economic activity in the U.S. The second decline in a row dealt a blow to an economy with an unemployment rate of 9.5%, and will increase concerns about the recovery.
A rising May trade deficit reported this week caused forecasters to lower their sights on second-quarter economic growth. Research firm Macroeconomic Advisers, reacting to Tuesday's trade report, cut its tracking estimate of gross domestic product by eight-tenths to 2.4%. GDP is the broad measure of U.S. economic activity.
The 0.5% drop in June retail sales was due partly to lower demand for cars and parts, which tumbled 2.3%.
Excluding autos, all other retail sales slipped 0.1%, after falling 1.2% during May. Economists expected a 0.1% dip in June ex-auto sales.
Gas station sales in June tumbled 2.0%. Government data show gas prices fell that month, which would lower the value of station receipts.
Building material and garden supply store sales fell 1.0%, the second big decrease in a row as the effects of government "cash-for-appliances" rebates faded.
Clothing store sales rose 0.6% in June, while general merchandise sales were up 0.2%.
Restaurant and bar sales rose 0.2%. Food and beverage store sales were down 0.5%.
Furniture sales were down 1.1%. Electronic and appliance stores were up 1.3%.
Health and personal care sales rose 0.5%. Mail order and Internet retail sales rose 1.0%.
Sales at sporting goods, hobby, book and music stores plunged 1.4%.
Big 5 Sporting Goods recently cut its second-quarter earnings outlook, posting a 0.5% drop in same-store sales. The El Segundo, Calif., sporting goods merchant blamed the sluggish economic recovery.
Separately, U.S. import prices plunged by the largest amount in more than a year in June as broad-based declines continued to keep a lid on inflation amid an uneven recovery.
Import prices fell 1.3% in June from May, the Labor Department said Wednesday. The decrease was the second in as many months and marks the first time since early 2009 -- among the darker periods of the recession -- in which import prices have fallen for two straight months.
Economists surveyed by Dow Jones Newswires were expecting import prices to drop by 0.4%. On an annual basis, import prices in June were up 4.5%, sharply lower than 8.7% they were up in May.
The June decrease followed a revised 0.5% drop in May. The Labor Department initially estimated import prices slipped 0.6% in May.
The data shows slack from the worst recession since the 1930s is continuing to hold down prices in the United States.
With the U.S. economy improving only slowly, inflation has been subdued for the past couple of years. It is expected to remain that way, and some officials have even begun issuing warnings about deflation.
In a recent interview with the Wall Street Journal, Boston Federal Reserve President Eric Rosengren said the risk of deflation has risen and "is more of a risk than I would like to see at this point." Atlanta Fed President Dennis Lockhart has said it would be appropriate for the central bank to consider what it would do in a deflation scenario.
Price gauges watched by Federal Reserve policymakers have been calm and are expected to remain tame, giving the central bank room to keep key interest rates near zero to bolster the recovery.
Wednesday's report shows petroleum import prices fell 4.4% in June from May. Despite the decline in June, petroleum prices were up 11.7% on the year. Overall prices for fuel and lubricant products slid 4.0% in June from May.
Excluding petroleum, import prices were down 0.5% from May.
Meanwhile, falling fruit and vegetable prices pulled food import prices down 1.7% in June after months of steady increases.
Prices of imports from several of the U.S.'s largest trading partners in June posted their steepest declines in more than a year.
Prices of imported goods from the European Union dropped 0.9% -- the largest decline since December 2008. Prices of goods from Japan crept upward 0.1% on a monthly basis, while those from China fell 0.3% -- their largest drop since January. Prices of products from Canada fell 1.6% -- the largest decline since February 2009 -- while prices for products from Mexico slipped 0.8%.
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