Retail sales in U.S. increased less than forecast in June

Restaurant Receipts

Receipts at restaurants and bars decreased 1.2% in June, the most since February 2008. Sales dropped 2.2% at building materials outlets, the most since May 2012. Purchases at department stores declined 1% in June.

Eight of 13 major categories showed an increase last month, led by a 1.8% gain at automobile dealers. Purchases rose 2.4% at furniture and home furnishing chains, the most since May 2012.

Retail sales excluding autos and gasoline unexpectedly fell 0.1%.

Service-station sales rose 0.7% after a 0.4% increase. Costlier gasoline in early June probably lifted receipts at filling stations. The Commerce Department’s retail sales data aren’t adjusted for changes in prices.

Gasoline Prices

A gallon of regular gasoline at the pump reached $3.63 on June 9, before easing in the next few weeks to a five-month low of $3.47 on July 7, according to AAA, the biggest U.S. motoring group. Retail gasoline has again reversed course, having risen each day last week as crude oil costs surged and refinery units shut down for repairs.

Purchases excluding autos, gasoline and building materials, which render the figures used to calculate gross domestic product, rose 0.1% after a 0.2% increase in the previous month.

Automobile demand remains a bright spot as Americans replace older vehicles. Cars and light trucks sold in June at a 15.89 million annual rate, the fastest since November 2007, according to industry data from Ward’s Automotive Group. Attractive financing offers and steady hiring are also helping generate more industry sales.

Ford Motor Co. and General Motors Co., makers of the best- selling big pickups in the U.S., reported June sales that beat analysts’ estimates. Low borrowing costs and rising consumer wealth should continue to support spending, according to Jenny Lin, Dearborn, Michigan-based Ford’s senior U.S. economist.

Household Wealth

Household wealth has been boosted by a rally in the stock market and higher property values. Home prices in the 12 months ended in April rose by the most in more than seven years, according to the S&P/Case-Shiller index of property values. The Standard & Poor’s 500 Index last week reached a record high.

“Economic indicators continue to improve,” Lin said on a July 2 sales call. The “consumer spending growth pace is slowly picking up.”

Costco Wholesale Corp., the largest U.S. warehouse-club chain, reported a 6% gain in June sales at U.S. stores open at least a year, more than analysts’ projections.

Fed Chairman Ben S. Bernanke, in testimony to Congress this week, may shed more light on the central bank’s view of the economy and how policy makers may begin scaling back $85 billion in monthly bond purchases. The U.S. needs “highly accommodative” monetary policy for the foreseeable future, he said last week.

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