US retail sales slump for third month in row in June
US retail sales fell for a third straight month in June as demand slumped for everything from cars and electronics to building materials, a sign the economic recovery is flagging.
Retail sales slipped 0.5pc, the Commerce Department said on Monday.
It was the first time sales had dropped in three consecutive months since late 2008, when the economy was still mired in a deep recession. Analysts polled by Reuters had expected retail sales to rise 0.2pc.
"Evidence is increasingly clear that the U.S. economy is slowing," said Jim Baird, an investment strategist at Plante Moran Financial Advisors in Kalamazoo, Michigan.
The report adds to a spate of weak economic data that is raising pressure on President Barack Obama ahead of his November reelection bid.
Republican challenger Mitt Romney is focusing his campaign on the weak economy that has plagued Obama's presidency.
The report raised hopes the Federal Reserve could launch another bond-buying program to help the economy.
U.S. stock index futures added to losses, while yields on American government debt fell, reinforcing the view the U.S. economy needs more stimulus from the Fed.
Job creation in the United States has slowed dramatically in the last few months as employers worry about a sagging global economy hurt by Europe's snowballing debt crisis.
The country's factory sector also has shown signs of contraction, although on Monday a survey of New York manufacturers perked up in July after a sharp drop-off the month before.
The retail data is worrisome because it suggests consumer spending, which drives about two-thirds of the economy, is also sagging.
"This is another example of how broader economic uncertainty is having an impact on economic activity," said Eric Fine, managing director of Van Eck G-175 strategies in New York.
Separately, a poll showed on Monday that American companies are scaling back plans to hire workers and a rising share of firms feel the European debt crisis is taking a bite out of their sales.
The poll showed 47 percent of companies polled felt their sales have dropped due to Europe's woes.
Among companies that produce goods rather than provide services, the impact was even greater, with nearly four in five reporting a Europe-driven decline in revenues, according to the poll.
The Commerce Department said sales of motor vehicles and parts dropped 0.6pc last month.
Receipts at electronics and appliance stores declined 0.8pc.
Sales of building materials slipped 1.6pc, while receipts as gasoline stations dropped 1.8pc.
Excluding autos, sales fell 0.4pc.