US retail sales edged higher in June, but the increase was less than economists had forecast, adding to concerns about the strength of the American consumer. The Commerce Department reported that retail sales rose 0.4% last month, below the 0.8% increase expected.

Key Takeaways

• Retail sales increased by 0.4% in June, below expectations.
• May’s retail sales were revised down to 0.4% from 0.5%.
• Excluding autos, sales rose 0.7%.

The report indicated that consumer spending, a major driver of the US economy, may be cooling off. While the labor market remains robust, with low unemployment, wage growth has been moderate, potentially limiting consumers’ purchasing power.

Sector Performance

Several sectors experienced growth, including online retailers and restaurants. However, sales at department stores continued to decline, reflecting the ongoing shift in consumer preferences towards online shopping.

Economists are closely monitoring retail sales data for signs of a slowdown in economic activity. The Federal Reserve is also paying attention to these figures as it considers whether to cut interest rates to support the economy.