Shoppers still spending cautiously
Retail sales fall again in June
WASHINGTON — A second straight month of declining retail spending will likely keep unemployment high and help weaken the recovery.
Not everyone is suffering, though. Shoppers with stable jobs and steady pay can find lots of bargains. The economy is bleaker for anyone seeking a job or at risk of losing one. Still, Americans as a group are spending less, and that threatens the pace of the recovery.
Federal Reserve officials took note of the weakness when they met in June, the minutes of that meeting show. The Fed signaled that it stood ready to take new steps to sustain the recovery if the economy worsened.
In the meantime, Americans will probably be spending warily.
“Clearly, the consumer is being more cautious now,’’ said David Wyss, chief economist at Standard & Poor’s in New York.
Consumer spending accounts for 70 percent of economic activity. It grew at a solid rate during the first three months of the year, but consumers have held back in the past two months. Many are worried about high unemployment, a volatile stock market, and a housing industry that has struggled without government incentives.
Retail sales revenue fell 0.5 percent in June, the Commerce Department said. That followed a 1.1 percent fall in May.
Pulling down the overall June figures was a drop in auto sales and declining gas prices. Excluding those categories, sales ticked upward slightly for the month.
Businesses are also slowing their pace of restocking their shelves. The Commerce Department said last Thursday that business inventories rose 0.1 percent in May, but sales dropped 0.9 percent, the first decline since March 2009.
Businesses helped drive the early stages of the recovery last year by building up their stocks after slashing them during the recession.
One encouraging sign for the economy is that companies are spending more on technology.
Intel, the world’s No. 1 semiconductor company, this week reported its biggest quarterly net income in a decade. The company’s second-quarter earnings figures showed that large corporations are now buying more computers that use Intel’s most expensive chips.
Consumers who have the extra cash are able to take advantage of discounts. Wyss said consumers with jobs were responding to bargains. It just does not show up in retail sales statistics, which are not adjusted for price changes.
Some retailers showed signs of strength in June. Department stores sales posted a 1.1 percent gain. Stores like Wal-Mart also posted a slight increase.