WASHINGTON (TIP): US retail sales unexpectedly fell in June as households cut back on purchases of automobiles and a range of other goods, raising concerns the economy was slowing again.
Tuesday’s weak retail sales report, together with signs of some softening of the labor market, dampened expectations a bit for an interest rate hike from the Fed Reserve this year, which most economists expect could come in September.
“The underlying tone of this report suggests that the recovery is beginning to show some signs of strain. If anything it will temper, at the margin, any consideration for a September rate hike,” said Millan Mulraine, deputy chief economist at TD Securities in New York. The Commerce Department said retail sales slipped 0.3% last month, the weakest reading since February, after May’s downwardly revised 1% increase.