US retail sales were flat for a second straight month in July, held back by slumping purchases of autos, the US government said today.
The US Commerce Department said that retail sales apart from cars and trucks rose slightly, climbing 0.2 per cent in the month. Strength was also seen in sales at general merchandise stores as well as bar and resturaunt receipts.
Sales of motor vehicles and parts dropped by 0.5 per cent in July, retracing a 0.5 per cent gain seen in June.
Analysts viewed the number as slightly bullish, reflecting an unbowed consumer sector.
"It's marginally better than we thought. Moderate increases in store groups other than autos and gas stations looked pretty good," said Ms Carol Stone, deputy chief economist at Nomura Securities International in New York.
Economists watch retail sales closely, as consumer spending makes up two-thirds of the nation's economic activity. That spending has been one of the few bright spots in an otherwise lackluster economic picture recently.
In response to the slowdown, the Federal Reserve has pushed interest rates lower six times this year by a total of 2.75 percentage points. The central bank is widely expected to make another cut when it meets again on August 21st to consider monetary policy.
"This is consistent with the view that the US economy really is on the road to recovery. Consumers are not pulling back. Consumer spending is going to get us into a second half 2001 rebound," said Mr Bill Cheney, chief economist at John Hancock Financial Services.
"I still expect the Fed to make another quarter-point move," he said.