Drop in US retail sales fuelled by autos and gas
RETAIL sales in the world’s largest economy fell by 0.5 per cent last month compared to May, official data showed yesterday. The drop in US retail sales was driven by a 2.3 per cent fall in auto sales and a two per cent fall in gasoline station sales. Food sales also dipped for the third time in four months, down 0.5 per cent.
However, the fact that sales excluding autos and gasoline rose by just 0.1 per cent suggests that households either saved the extra cash or did not have much to spend in the first place, said Paul Dales, US economist at Capital Economics. “Given that employment, hours worked and hourly earnings all fell in June, the latter appears more likely,” he added. “Activity at the end of the quarter was much weaker than at the start. It has become much more likely that private sector demand will not be able to offset the fading of the fiscal stimulus.”
Nick Beecroft, senior FX consultant at Saxo Bank, said: “Today’s US economic releases only served to underline the tepid, and probably stalling, nature of the US recovery.”