Consumers Hold Back as U.S. Retail Sales Miss Forecast: Economy

By Shobhana Chandra - Jul 15, 2013
American consumers kept their buying in check for goods other than automobiles in June, exercising a measure of self-restraint that indicates the economy ended the second quarter on a weak note.

Sales (RSTAMOM) at retailers climbed 0.4 percent last month, short of the 0.8 percent gain that was the median estimate of 82 economists surveyed by Bloomberg, according to Commerce Department figures issued today in Washington. Excluding the biggest gain at auto and parts dealers in seven months, demand was little changed from May.

The figures show households are replacing outdated vehicles and furnishing new homes and at the same time cutting back on non-essentials such as electronics and meals at restaurants. Economists at Morgan Stanley and Barclays Plc were among those trimming growth estimates for last quarter after the report.

“The consumer is going to remain a solid performer in the economy, though not a stellar one,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. Price is the second-best forecaster of retail sales over the past two years, according to data compiled by Bloomberg. “Looking forward, we’ll have a slow uptake from an exceptionally weak second quarter.”

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http://www.bloomberg.com/news/2013-07-15/retail-sales-in-u-s-increased-less-than-forecast-in-june.html