US retail sales fall more than expected

Retail sales were weaker than forecast in June, according to the Commerce Department.

Sales fell 0.2% from May, lower than the estimate for an increase by 0.1%, according to Bloomberg. The biggest sales drop was at brick-and-mortar stores that sell items including flowers, office supplies, and second-hand products. Sales at department stores also fell.

Stripping out automobile and gas sales, so-called core retail sales fell 0.1% (+0.4% was expected.)

The data suggest that consumer spending, which accounts for more than two-thirds of the US economy, made a weaker contribution to growth in the first half of 2017.

Consumer expectations for the economy as measured by the University of Michigan’s survey have softened this year. That appeared to be linked to opinions about economic policy, said Ellen Zentner, Morgan Stanley’s chief US economist, in a preview.

And it may be discouraging spending. In May, disposable personal income grew 0.5% month-on-month, but consumption only increased by 0.1%.

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