Retailers, consumers and prices
The Commerce Department said on Tuesday that total sales at U.S. retailers rose a less-than-expected 0.1 percent in June. Economists polled by Reuters had forecast total retail sales to rise 0.4 percent in June, following a 0.8 percent gain in May.
Part of the weaker-than-expected results were due to falling demand for cars. Auto and auto parts sales fell 3.3 percent in June — their worst month since February 2006. But even excluding autos, retail sales rose 0.8 in June, which was below the consensus estimate of 1.0 percent. Excluding autos, building supplies and gasoline, retail sales rose 0.4 percent in June.
Economists had expected government tax rebate checks to give a bigger boost to retail sales in June, despite the weak overall U.S. economy, as shoppers had excess cash to spend. But last week, major retail chains, like J.C. Penney, Target and Gap, released their June sales results and many did not see a rebate boost. Penney said it might have received a “modest” sales lift from the checks but any benefit would be “short lived.”
It’s a plan similar to the once the government followed in 2001, except at that point, the economy was already in a recession.