Sales at U.S. retailers unexpectedly dropped in June, curbing optimism about the strength of the rebound in consumer spending during the second quarter.
Purchases decreased 0.3 percent after a 1 percent advance in May that was smaller than previously reported, Commerce Department figures showed Tuesday in Washington. The median forecast of 82 economists surveyed by Bloomberg called for a 0.3 percent gain. Eight of 13 major retail categories showed declines in demand.
An early Memorial Day holiday that may have boosted sales in May at the expense of last month, and a longer school year caused by the harsh winter probably contributed to the more subdued sales performance for the quarter. Stronger gains in incomes will probably be needed to give consumer spending, which accounts for almost 70 percent of the economy, a bigger lift heading into the second half of the year.
“The weakness is pretty broad-based, but it does look like categories that you would consider to be seasonal in nature looked to be very weak,” said Stephen Stanley, chief economist at Stamford, Connecticut-based Amherst Pierpont Securities LLC, who projected June retail sales would be unchanged from the prior month. “It puts a little cold water on the idea that the consumer was gathering momentum.”
Estimates in the Bloomberg survey ranged from a decline of 0.2 percent to a 0.8 percent gain. May’s reading was revised down from an initially reported 1.2 percent increase.