US retail sales fall unexpectedly in June

Retail sales data, key indicator of overall consumer spending, shows drawback on sales in June, heightening concerns over slowing economy

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

The US Commerce Department reported a 0.3 percent fall in purchases in June, after a 1 percent gain in May. Five out of the 13 major retail categories showed a hike in demand, while the remaining eight declined.  

Retail sales - excluding automobiles, gasoline, building materials and food services - dropped 0.1 percent last month while so-called core retail sales fell 1.1 percent after increasing by 1.8 percent in May.

Since retail sales are adjusted for seasonal changes rather than price changes, data has remained volatile over the last few months. However, overall consumer spending has picked up pace. Compared with a year earlier, retail sales were up 1.4 percent in June.

Sales at service stations rose 0.8 percent, reflecting a rise in gasoline prices, while sales at electronic and appliance stores gained 0.1 percent, the biggest jump since September. Receipts at furniture stores on the other hand increased by 1.6 percent.

In a separate report also released by the US Commerce Department last month, business inventories rose 0.4 percent in April, posting the largest gain since May 2014. Inventories are among the key components of gross domestic product (GDP).

Seeing that the Federal Reserve is waiting for stability in economic data before raising interest rates, the fragile data could push a possible September rate hike further into 2016.

TRTWorld and agencies