US retail sales fall in June for third straight month

16 July 2012 16:30  [Source: ICIS news]

WASHINGTON (ICIS)--US retail sales fell by 0.5% in June from May, the Commerce Department said on Monday, an accelerating decline that marked the third straight month of downturns in the crucial indicator of consumer spending.

In its monthly report, the department said that retail sales in June were at a seasonally adjusted $401.5bn (€329.2bn), down by 0.5% from May’s sales level.

The June fall-off followed 0.2% declines in both April and May.

The National Retail Federation (NRF) said that June’s decline in retail sales indicate that “persistently high domestic unemployment, stagnant job growth and international economic unease have taken a toll on American consumers” over the last three months.

Consumer spending is a critical element of the US economy, accounting for as much as 70% of all commercial activity and production.

Referring to a run of recent negative economic indicators, NRF chief economist Jack Kleinhenz said that “Weak economic numbers over the past few weeks have increased anxiety about the future direction of the economy”.

Kleinhenz said that the three-month run of declining retail sales “is discouraging but not demoralising”.

NRF president Matthew Shay said the fall-off in consumer spending since the first quarter this year may be only a temporary setback as families save money for back-to-school shopping in July and August.

The two months leading up to the beginning of the US academic year in September typically see an uptick in retail sales.

Shay said that retailers are pinning their hopes on that academic upturn, but in the meantime “today’s statistics should concern every policymaker in Washington, and compel them to revisit burdensome regulations and job-killing tax increases set to take effect early next year”.

Unless Congress acts to renew them, at the end of this year major Bush-era tax cuts are set to expire, which will cut sharply into households’ net earnings in the new year.

The Commerce Department data showed that consumer spending on discretionary items fell across the board in June – with sales of electronics, appliances, furniture, sporting goods, music and books all down – while only necessities such as clothing and accessories saw modest sales gains in June.

($1 = €0.82)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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