Retails Sales Dropped Drastically In July
Retail sales fell in July making it the worst performance that they have had in five months. This is due to the poor economy mixed together with the impact that the stimulus checks that was given to citizens from the U.S. government.
The Commerce Department reported Wednesday that retail sales dipped 0.1 percent last month, the first decline since sales had fallen by 0.5 percent in February. It was a worse showing than the flat reading economists had been expecting. The weakness last month came after another big slide in auto sales as Detroit faced its worst sales month in 16 years. Automakers have been battered by the weak economy and record gasoline prices which have cut into demand for their once-popular sport utility vehicles and pickup trucks.
Excluding the big drop in autos, retail sales would have posted a 0.4 percent increase. While that was a positive reading, it was still the weakest showing for sales excluding autos in five months. Much of what little strength there was in July came from a big jump in sales at gasoline stations, which were up 0.8 percent. That increase reflected surging prices rather than increased demand, however.
Gasoline pump prices hit an all-time high during the month at $4.11 per gallon. Without the big rise in gasoline station sales, retail sales would have fallen by 0.2 percent in July. The disappointing performance of retail sales meant that the consumer sector, which accounts for two-thirds of total economic activity, got off to a weak start at the beginning of the third quarter. The government wrapped up distributing the bulk of the economic stimulus payments for a total of $92 billion through the end of July.