Lower auto sales in July were one reason for the muted report. Taking out autos, retail sales were still up by only 0.1%, while the consensus estimate was all the way up at 0.4% growth. June’s reading was also up by 0.4%.
Retail sales have disappointed since April, when the they were up 1.1%. In May, retail sales increased by 0.5%, followed by weaker growth in June and none in July.
Sales increased in areas such as clothing and accessories, health, personal care, food and beverage, sporting goods, food service, and drinking places. However, sales decreased in mostly big ticket areas such as general merchandise, furniture, appliance stores, home furnishings, electronics, and nonstore retailers.
What is at issue now is that it seems likely that GDP expectations will have to be adjusted down to reflect the lack of consumer spending.
Economists are hoping that the third quarter continues to rebound from the second quarter. With July being the first month of the quarter, this report gets the third quarter off to a crummy start.
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