Source: Bloomberg.com
Sales at U.S. retailers dropped in July for the first time in five months as record gasoline prices and tighter credit reduced automobile purchases.
Spending dropped 0.1 percent from June, the Commerce Department said today in Washington. Excluding cars, sales rose 0.4 percent, less than anticipated. The Labor Department said prices of imported goods soared 21.6 percent in the year to July, the most since at least 1982.
Consumer spending, making up more than two-thirds of the economy, is likely to keep fading as a boost from tax rebates fades and households try to cope with job losses and house-price declines. Macy’s Inc., the No. 2 U.S. department-store chain, today said profit may fall more than it forecast. Wal-Mart Stores Inc., Kohl’s Corp. and J.C. Penney Co. also report this week.
“With the tax-rebate effects dissipating and the labor market weakening, we should see consumer spending slow through the remainder of the year,” said Dana Saporta, an economist at Dresdner Kleinwort in New York, which correctly forecast sales excluding autos.
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