June 2012 saw the third consecutive decline in retail sales according to the United States Commerce Department in a report released on Monday, July 16th. Analysts believe this is an additional that the economy is slowing in its recovery from the Great Recession.
A decrease of 0.5 percent was recorded for retail and food service sales in June. The total amount when seasonally adjusted is $401.52 billion. The report for June is the first time since 2008 that the retail sales report has recorded lower sales for three months in a row.
Many economists believed the data would show a 0.2 percent rise.
Consumer spending accounts for about 70 percent of the United States economy and retail sales are major part of the calculation. In early 2012 household spending helped the economic recovery.
However, with unemployment stuck at 8.2 percent, housing prices remaining low and uncertainty surrounding the global economy it appears that consumers have adopted a more cautious attitude.
According to the most recent Thomson Reuters/University of Michigan Poll of Consumer Sentiment fell in July to its lowest level this year.
The Federal Reserve has expressed concern that consumer demand might not be great enough to spark faster economic growth and job creation. According to the data from the second quarter of 2012 it is evident that the recovery has slowed.
The report revealed that American consumers spent less on a far-ranging variety of merchandise in June that included building materials, sporting goods and furniture.
While the economy has had a luke-warm recovery auto sales have been promising. However, June car and parts sales actually declined by 0.6 percent according to the Department of Commerce.
Removing auto sales from the calculations retail sales were lower by 0.4 percent, the same decline as seen in May, 2012.
Consumers did spend 1.6 percent less at gas stations. The drop is related to falling gas prices. This is a good thing as consumers have more money to spend in other retail and food service sectors.
With gasoline purchases excluded from the data retail sales slid by 0.3 percent in June.
Non-store retailers, a group that includes Internet retailers rose 0.5 percent in June. Clothing, food and beverage store sales also rose.
The June retail figures may play a role in this week’s presidential campaign. President Obama will likely blame the slow growth on Congress’ failure to adopt his jobs bill and failure to increase spending on infrastructure projects as major reasons for the slowdown. Mr. Romney, the president’s challenger will surely blame the President for his “failed policies.”
While the economy, in general, and retail sales, in particular, slow, the environment in Washington continues to stagnate.
