Checkout lines at most American retailers were noticeably shorter in July as sales stalled following one of the strongest quarters in years, indicating consumer spending will cool in the third quarter, Bloomberg reports.
The Commerce Department today says purchases totaled $457.7 million last month, little changed from the $457.9 million in June.
Those figures reflected declining receipts at eight of 13 major categories—including service stations, grocery stores and clothing shops—that offset improving demand for autos.
But the figures aren’t adjusted for inflation, or the lack thereof. Another report shows that lower prices for gasoline and food, along with declining margins at apparel merchants, contributed to an unexpected drop in wholesale costs.
Combined, the data point to a lack of pricing power that could give Federal Reserve policy makers reason to keep interest rates low for the time being.
“I don’t want to get dark on the consumer, but this latest report adds to the list of uncertainties about the back half of the year and keeps the Fed in kind of a wait-and-see approach to policy,” says Kevin Cummins, an economist at RBS Securities Inc. in Stamford, Connecticut.
Bloomberg has the full story.
