- Post 18 July 2012
- By Copy Editor
WASHINGTON – Americans cut their spending at retail businesses for a third straight month in June, as a weak job market made consumers more cautious.
Retail sales fell 0.5% in June from May, the Commerce Department said Monday. Consumers spent less on autos, furniture, appliances, on building and garden supplies and at department stores.
The drop in sales followed declines the previous two months. Retail sales haven't fallen for three straight months since the fall of 2008, the height of the financial crisis.
Some of the weakness in recent months reflects falling gasoline prices. But even excluding sales at gas stations, retail spending fell 0.3% in June from May.
Consumers are growing less confident in the economy and have pulled back sharply on spending this spring. Consumer spending drives 70% of economic activity.
Yet the Commerce Department says business inventories grew 0.3% in May from April, although total business sales fell 0.1% in May.
Total stockpiles rose to $1.58 trillion in May — nearly 20% higher than the low point in September 2009, shortly after the recession ended. When businesses step up restocking, they order more goods. That generally leads to increased factory production and higher economic growth.
But stockpile growth largely depends on the spending habits of U.S. consumers. Americans have reduced their spending at retail businesses for three straight months, constrained by weak job creation and paltry wage increases.
The economy is expanding too slowly to lower the unemployment rate, which stayed at 8.2% in June. ...continues on USAToday...