Retail sales in the U.S. rose by much less than anticipated in the month of June, according to a report released by the Commerce Department on Monday.
The report said retail sales increased by 0.4 percent in June compared to a downwardly revised 0.5 percent increase in May.
Economists had been expecting retail sales to rise by 0.8 percent compared to the 0.6 percent growth originally reported for the previous month.
The increase in retail sales in June was partly due to a 1.8 percent jump in sales by motor vehicle and parts dealers, which followed a 1.4 percent increase in May.
Excluding the increase in auto sales, retail sales came in unchanged in June versus economist estimates for a 0.5 percent increase.
Notable increases in sales by furniture and home furnishing stores and non-store retailers were offset by significant decreases in sales by building materials and supplies dealers, miscellaneous store retailers and food services and drinking places.
The report also showed that core retail sales, which exclude gasoline, autos and building materials, edged up by just 0.1 percent in June compared to a downwardly revised 0.2 percent increase in May.
"This all means that annualized real consumption growth in the second quarter may have been between 1.0-1.5%, down from the 1.5-2.0% we previously expected," said Paul Dales, Senior U.S. Economist at Capital Economics. "The risks to our forecast that second-quarter GDP rose by 1.0% are shifting to the downside."
"Looking ahead, the latest pick-up in jobs and earnings growth bode well for consumption in the third quarter," he added. "But it is disconcerting that retail sales growth lost more momentum as the second quarter progressed."
The Commerce Department noted that June retail sales were up by 5.7 percent compared to the same month a year ago. Total sales for the April through June period were up also 4.6 percent year-over-year.
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