United States: Retail sales contract again
July 16, 2012
In June, retail sales declined 0.5% over the previous month in nominal terms. The decline exceeded the 0.2% contraction recorded in May and contrasted market expectations, which had seen retail sales adding 0.2%. Nine out of the 13 subcategories composing the index declined in June, with sales of building materials, sporting goods and at gasoline stations recording the largest losses. Retail sales excluding autos and gas - a closely watched subcategory within the retail trade index - contracted 0.2% over the previous month (May: -0.1% month-on-month), contrasting market expectations of a 0.3% increase. In annual terms, retail sales increased 3.8% in June, down from the 5.1% expansion recorded in May. As a result, the trend continues to point down, with annual average growth in retail sales moderating from 7.2% in May to 6.8%. Retail sales are a good indicator for the evolution of consumer spending, a key part of economic growth in the United States, as it accounts for over two thirds of overall GDP.