US retail sales slid a larger-than-expected 1.1 per cent in June, the Commerce Department said today in a report showing the stalwart American consumer struggling to deal with high energy prices.
In a separate report that may ease inflation concerns, the labour department said prices of goods imported into the US unexpectedly dipped 0.2 per cent in June. Export prices fell by 0.6 per cent, their first decline in nearly a year.
The June decline in retail sales was the largest since a matching 1.1 per cent drop in February 2003. Stripping out a slide in auto sales, retail purchases fell a smaller 0.2 per cent.
Both measures were weaker than anticipated by Wall Street economists who had projected a smaller 0.6 per cent drop overall and a 0.2 per cent rise in sales aside from autos.
"The retail sales data are a little weaker than expected and they were expected to be weak. The bigger surprise was that even excluding auto transactions, the numbers were weak," said Mr Patrick Fearon, economist with A.G. Edwards & Sons in St. Louis.
The US economy has been showing signs of slowing from its rapid pace of growth in the latter half of 2003 and early this year. The Federal Reserve still felt confident enough that the recovery would keep its footing to raise interest rates by a quarter percentage point in June.
Big US retailers last week reported weak June sales, a trend they blamed on energy costs and the effects of cooler weather, which dampened purchases of summertime items.