U.S. retail sales rise less than expected, building materials fall
US retail sales rose less than expected in June, adding to signs of a slowdown in economic growth that could argue against the Federal Reserve's plan to start trimming its monetary stimulus later this year.
The Commerce Department said on Monday retail sales increased 0.4pc last month as demand for automobiles soared. However, sales of building materials fell.
It was still the third straight month of gains in sales and followed a revised 0.5pc rise in May.
Economists polled by Reuters had forecast retail sales, which account for about 30pc of consumer spending, rising 0.8pc after a previously reported 0.6pc gain in May.
Higher gasoline prices also accounted for part of the increase in retail sales last month and the overall tone of the report was mixed.
So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, edged up 0.1pc after rising 0.2p in May.
The signs of slower domestic demand, as well as weak trade and manufacturing data, comes as the Fed is debating cutting back the $85bn in bonds it is purchasing each month to keep borrowing costs low and stimulate the economy.
Last month, receipts at auto dealerships rose 1.8pc after advancing 1.4pc the prior month. Excluding autos, sales were flat after rising 0.3pc the prior month.
Sales at building materials and garden equipment suppliers fell 2.2pc, the weakest reading since May last year.