Retail sales in the United States fell less than analysts expected in June due to weaker performance in the auto and natural gas sectors, government data showed on Tuesday.
Slower consumption growth adds to recent data showing the world’s largest economy is gradually cooling — a trend that may boost the central bank’s confidence that it may soon start cutting interest rates.
To reduce demand and bring down inflation sustainably, the Federal Reserve quickly raised the key lending rate and in recent months, kept it at a decade high.
But in June, total retail sales were $704.3 billion, almost unchanged from May’s figure, according to the Commerce Department.
Meanwhile, May’s increase was revised slightly higher.
Compared to a year ago, the rise in June was 2.3 percent, also down from the previous month.
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Analysts had long expected consumers to retreat as higher interest rates bite, raising borrowing costs for consumers and businesses.
“We believe consumption growth, if anything, will slow further (in the second half of this year) as high interest rates continue to weigh on demand and the labor market takes a further turn for the worse,” he said in a note. of Pantheon Macroeconomics. .
Among sectors, sales at car dealerships fell 2.3% from May, while those at gas stations fell 3.0%.
However, excluding autos and gas, overall retail sales rose 0.8% in June – suggesting there may still be some way for demand to ease.
Sales at restaurants and bars rose 0.3 percent from the previous month, the Commerce Department reported.
The Fed is due to make its next rate decision at the end of July, and analysts widely expect the central bank to start cutting interest rates in September.
Source: AFP