Retail sales dip in July, import prices up
U.S. retail sales edged down 0.1 percent in July on a big drop at auto dealers, the government said on Wednesday in a report suggesting consumers were straining to keep spending up amid rising prices.
Analysts said the fall in retail sales, the first in five months, showed the buying punch from government stimulus checks was fading and raising chances that consumer spending will falter in the second half, further slowing a sluggish economy.
“The consumer is still under enormous pressure as employment is declining, real wages are down, housing and stock market wealth are down and credit conditions continue to tighten,” said economist Nigel Gault of Global Insight in Lexington, Massachusetts.
A separate report showed a bigger-than-expected jump in July import prices and underlined the pressure costlier oil was putting on the economy. Over the past 12 months, import prices have soared 21.6 percent — the biggest gain on records dating back 26 years 24 hour payday advances.
The slowdown in retail sales reported by the Commerce Department was concentrated in autos as shoppers continued to stay away from showrooms despite an easing in gasoline prices last month.
Auto sales fell 2.4 percent, the biggest drop since April, after a 2.1 percent June drop and were off a whopping 10.5 percent from a year ago.
In recent months, sales of sport utility vehicles and other gas guzzlers have fallen particularly hard as consumers turn to more fuel-efficient cars.
“This data is consistent with our bearish forecast of personal consumption throughout the second half of 2008,” said Joseph Brusuelas, chief economist at Merk Investments.
Filed under: business by Fred