WASHINGTON – Retail sales in the United States fell in June by the largest amount in nearly two years, as high gasoline prices and falling home values continued to take a toll on consumer spending.
The overall 0.9-percent decrease followed a revised 1.5-percent gain in May, said the Commerce Department.
“Consumer spending can’t be sustained at the pace it has been,” Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York told Bloomberg News. “We’ll remain below trend for growth in the second half. This could be the beginning of the long-anticipated slowdown in housing-related spending.”
Retail sales, which account for almost half of all consumer spending, were projected to fall 0.1 percent after a 1.4-percent gain in May, according to a Bloomberg News survey of 75 economists. Last month’s drop was the largest since August 2005.
Purchases not including automobiles fell 0.4 percent, the most since September. They had been forecast to increase 0.2 percent. Automobile dealer and parts store sales fell 2.9 percent in June after registering a 1.1-percent gain in May.
Consumer spending, however, is expected to rise at an average 2.6-percent annual pace in the second half of the year, according to economists, compared with an average 3.7-percent quarterly increase over the last decade. More jobs, rising wages, gains in exports, manufacturing, and business investment are expected to drive the growth.
