Star Tribune

Retail sales post unexpected 0.1 percent decline in July, raising new worries about consumers
Star Tribune

Retail sales outside of autos turned in a disappointing performance in July, underscoring concerns about the timing and durability of a recovery from the worst recession since World War II. The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a gain of 0.7 percent.

While autos, helped by the start of the Cash for Clunkers program, showed a 2.4 percent jump — the biggest in six months — there was widespread weakness elsewhere. Gasoline stations, department stores, electronics outlets and furniture stores all reported declines.

The July dip was the first setback following two months of modest sales gains. Excluding autos, sales fell 0.6 percent, worse than the 0.1 percent rise economists had forecast.

The July weakness highlighted worries about the potential strength of the recovery from the recession. Economists are worried that consumers could remain hunkered down which would make any recovery exceptionally weak since consumer spending accounts for about 70 percent of total economic activity.