United States: Retail sales slump in June
July 14, 2015
In June, growth in retail sales decreased 0.3% over the previous month, in nominal terms. The print contrasted the 1.0% increase recorded in May (previously reported: 1.2% month-on-month) and undershot market expectations of a 0.3% increase. The weak result reignites concerns about the strength of the economy in Q2. 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.
June’s result mainly reflects a decrease in sales at clothing retailers, furniture stores and motor vehicle dealers. Electronic and appliance stores as well as gas stations tallied increased sales.
Retail sales excluding cars and gas—a closely watched subcategory of the retail trade index—fell 0.2% in June over the previous month. The result contrasted the 0.5% increase recorded in May and the 0.6% increase expected by the market.
Retail sales rose 1.4% in annual terms in June, which was below the 2.3% tallied in May. Moreover, the annual trend declined, with annual average growth in retail sales falling from May’s 3.5% to 3.2%.
Author: Carl Kelly, Economist