Retail sales increased in June, according to a new Commerce Department report, but the gain was far less than analysts were expecting.
The 0.2% pickup was broad based but well short of a 0.6% increase in consensus forecast of economists by Bloomberg News, and was the weakest performance since January.
Since a 1.5% rise in March, retail sales have continuously lost momentum, up 0.6% in April followed by a 0.5% rise in May and now just up 0.2% to end the quarter. Year-over-year retail sales are up 4.3%.
Auto sales fell 0.3% in June, the first monthly decline in five months. Excluding autos, retail sales rose 0.4% in June for the second consecutive month.
Despite the minimal headline rise, the monthly gain was widespread across categories with a rise in 9 of the 13 major categories.
“Since the short-lived rebound at the end of the first quarter, retail sales have shown little indication of sustainable momentum," said Lindsey Piegza, chief economist at the investment firm Sterne Agee. "While still positive, monthly gains in spending have weakened to just a fraction of the gains seen in February and March, pulling the annual gain down to nearly half of the pace seen just a year or two ago."
She said with job gains dominated by part-time, temporary and low-wage employment, wage pressures are virtually nonexistent, offering the consumer no additional spending power out in the marketplace.
“Those hopeful warmer weather alone would spark an upward trend in consumer spending have thus far been disappointed,” said Piegza, referring to hopes by some analysts earlier this year that cold weather was to blame for lackluster retail sales and a disappointing first quarter gross domestic product performance.