Make us your home page
Instagram

U.S. economy appears weaker as retail sales slump

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 percent from May to June, the Commerce Department said Monday.

Associated Press

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 percent from May to June, the Commerce Department said Monday.

WASHINGTON — The outlook for the U.S. economy appeared dimmer Monday after a report that Americans spent less at retail businesses for a third straight month in June.

The report led some economists to downgrade their estimates for economic growth in the April-June quarter. Many now think the economy grew even less than in the first quarter of the year, when it expanded at a sluggish 1.9 percent annual rate.

Spending in June fell in nearly every major category — from autos, furniture and appliances to building, garden supplies and department stores. Overall, retail sales slid 0.5 percent from May to June, the Commerce Department said.

Retail sales hadn't fallen for three straight months since the fall of 2008, at the height of the financial crisis.

The weak U.S. spending figures were released on the same day that the International Monetary Fund slightly lowered its outlook for global growth over the next two years.

"However hard you look, there's just no good news in this report," said Paul Ashworth, chief U.S. economist at Capital Economics.

Weakening retail spending could make the Federal Reserve more likely to act further to try to encourage more borrowing and spending by lowering long-term interest rates. The Fed's policy committee will meet at the end of this month.

Most economists don't expect new Fed action after that meeting. But some said Monday's Commerce report, coming after three straight months of tepid hiring, makes some Fed action more likely by year's end.

Ashworth said economic growth likely slowed to an annual rate of just 1.5 percent in the second quarter. That isn't enough to lower high unemployment. The U.S. unemployment rate is 8.2 percent.

In Monday's report, Commerce also said Americans spent less in April than previously thought. In part because of that, Michael Feroli, an economist at JPMorgan Chase, lowered his estimate of growth in the April-June quarter from a 1.7 percent annual rate to a 1.4 percent rate. And he lowered his forecast for the July-September quarter to a 1.5 percent growth rate, down from a 2 percent rate.

The IMF lowered its outlook for global growth over the next two years in part because of Europe's financial crisis and slower expansion in China and India.

The international lending organization predicts global growth of 3.5 percent this year, down from its forecast in April of 3.6 percent. It cut its forecast for 2013 to 3.9 percent growth from 4.1 percent.

The IMF also cut its forecast for U.S. growth to 2 percent this year and 2.3 percent next year, both slightly below its previous estimates.

Inventories grow

U.S. companies added to their stockpiles in May, but their sales fell for a second straight month. Business inventories grew 0.3 percent in May from April, matching April's increase, the Commerce Department reported Monday. Total business sales fell 0.1 percent in May, matching the April decline. Total stockpiles rose to $1.58 trillion in May. That's nearly 20 percent higher than the low point in September 2009, shortly after the recession ended.

U.S. economy appears weaker as retail sales slump 07/16/12 [Last modified: Monday, July 16, 2012 8:13pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Tampa Bay cools down to more moderate home price increases

    Real Estate

    The increase in home prices throughout much of the Tampa Bay area is definitely slowing from the torrid rate a year ago.

    This home close to Bayshore Boulevard in Tampa sold for $3.055 million in August, making it Hillsborough County's top sale of the month. [Courtesy of Bredt Cobitz]
  2. With successful jewelry line, Durant High alum Carley Ochs enjoys 'incredible ride'

    Business

    BRANDON

    As a child Carley Ochs played dress up, draped in her grandmother's furs.

    Founder Carley Ochs poses for a portrait in her Ford Bronco at the Bourbon & Boweties warehouse in Brandon, Fla. on September 19, 2017. Ochs is a Durant High and Florida State University graduate.
  3. At Menorah Manor, planning paid off during Irma

    Nursing Homes

    ST. PETERSBURG — Doris Rosenblatt and her husband, Frank, have lived in Florida all of their lives, so they know about hurricanes.

    Raisa Collins, 9, far left, works on a craft project as Certified Nursing Assistant Shuntal Anthony holds Cassidy Merrill, 1, while pouring glue for Quanniyah Brownlee, 9, right, at Menorah Manor in St. Petersburg on Sept. 15. To help keep its patients safe during Hurricane Irma, Menorah Manor allowed employees to shelter their families and pets at the nursing home and also offered daycare through the week. The facility was able to accommodate and feed everyone who weathered the storm there. [LARA CERRI   |   Times]
  4. After Irma, nursing homes scramble to meet a hard deadline

    State Roundup

    TALLAHASSEE — Florida's nursing homes and assisted-living facilities find themselves in an unfamiliar place this week — pushing back against Gov. Rick Scott's administration over new rules that require them to purchase generator capacity by Nov. 15 to keep their residents safe and comfortable in a power …

    In this Sept. 13 photo, a woman is transported from The Rehabilitation Center at Hollywood Hills as patients are evacuated after a loss of air conditioning due to Hurricane Irma in Hollywood. Nine have died and patients had to be moved out of the facility, many of them on stretchers or in wheelchairs. Authorities have launched a criminal investigation to figure out what went wrong and who, if anyone, was to blame. [Amy Beth Bennett | South Florida Sun-Sentinel via AP]
  5. Trigaux: How Moffitt Cancer's M2Gen startup won $75 million from Hearst

    Business

    TAMPA — A Moffitt Cancer Center spin-off that's building a massive genetic data base of individual patient cancer information just caught the attention of a deep-pocketed health care investor.

    Richard P. Malloch is the president of Hearst Business Media, which is announcing a $75 million investment in M2Gen, the for-profit cancer informatics unit spun off by Tampa's Moffitt Cancer Center. Malloch's job is to find innovative investments for the Hearst family fortune. A substantial amount has been invested in health care, financial and the transportation and logistics industries.