Slower Retail Growth Creates Concern for Economy
Retail sales growth slowed in June, according to data from the Commerce Department released Monday, and once again the Federal Reserve’s stimulus plans come into question.
According to the Commerce Department data, retail sales increased 0.4 percent last month, a slight drop from the 0.5 increase in May. A Reuters poll of economists said a 0.8 rise was expected in June, and the numbers clearly did not meet expectations.
The increases came primarily from automobile sales and gasoline prices, while building material numbers dropped by the largest margin in a year, creating concern for the housing market, which has had fluctuating numbers recently.
The core sales, a statistic that removes automobiles, gasoline and building materials, and is believed to correspond more closely to consumer spending trends, showed a rise of just 0.1 percent, a drop from May’s 0.2 percent rise.
Continued economic growth is seen as an indicator to eventually lead the Federal Reserve to slow or discontinue its stimulus package through bond sales. But the new Commerce Department data indicates that the Feds might be inclined to keep the stimulus in place until the economy shows more consistent growth.
It provides no additional evidence that the economy is gaining momentum," said Annalisa Piazza, a senior economist at Newedge Strategy in New York. "It doesn't allow the Fed's chairman to have a firmer tone as the economic recovery remains gradual."
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.