US retail sales declined a negative 0.1 percent in July largely in the face of lower car and truck sales as Americans cut back on big-ticket purchases, a government report showed Wednesday.
The Commerce Department's monthly snapshot showed that American consumers cut spending as a housing slump, a credit crunch and high oil prices continued to buffet the US economy.
Sales declined by the biggest margin since February. Most analysts had predicted a drop in sales.
Excluding auto sales, sales rose 0.4 percent in July showing that lower car and truck sales weighed down overall retail sales.
The picture improved somewhat, however, looking back in the rear-view mirror as the government revised June retail sales slightly higher to show a gain of 0.3 percent compared with an original tally of 0.1 percent. Excluding autos, June sales were revised to a gain of 0.9 percent from an initial estimate of 0.8 percent.
July's retail sales numbers are likely to bolster the outlook of some economists who say the world's largest economy is slowing and will likely post lackluster growth in future months.
The contraction in sales last month comes despite the Bush administration injecting a giant 168-billion-dollar stimulus into the economy which was stuffed with one-off tax rebates it hoped would fire up consumer spending.
The decline in overall sales was largely tied to falling car and truck sales which have been hit by high fuel prices this year.
Sales of motor vehicles and parts fell a negative 2.4 percent after posting a contraction of 2.1 percent in June.
Major auto manufacturers such as General Motors, Ford and Chrysler have all reported declining sales in recent months as consumers have shunned gasoline-guzzling trucks and sports utility vehicles, and cut back on big-ticket purchases.
The report did show, however, that furniture and home furnishing stores had a better July than June as sales increased 1.0 percent compared with a decline of 1.2 percent in the prior month despite the lingering housing slump.
Electronic and appliance stores saw a 0.8 percent gain in sales while gasoline station sales also saw turnover up 0.8 percent.
Bar and restaurant sales declined a negative 0.2 percent, however, following a rise of 0.3 percent in June suggesting that Americans may be cutting back on eating out.
Source: AFP Global Edition
