GO
Loading...

Retail sales miss estimates; NY factory growth accelerates

Sam Hodgson | Bloomberg | Getty Images

U.S. retail sales rose less than expected in June, adding to signs of a slowdown in economic growth, while a separate report showed that growth in New York state's manufacturing sector accelerated in July.

The Commerce Department said on Monday retail sales increased 0.4 percent last month as demand for automobiles soared. However, sales of building materials fell.

It was still the third straight month of gains in sales and followed a revised 0.5 percent rise in May.

Economists polled by Reuters had forecast retail sales, which account for about 30 percent of consumer spending, rising 0.8 percent after a previously reported 0.6 percent gain in May.

(Click here to track the U.S. stock market in premarket trade following the reports.) Higher gasoline prices also accounted for part of the increase in retail sales last month and the overall tone of the report was mixed.

So-called core sales, which strip out automobiles, gasoline, and building materials and correspond most closely with the consumer spending component of gross domestic product, edged up 0.1 percent after rising 0.2 percent in May.

The signs of slower domestic demand, as well as weak trade and manufacturing data, comes as the Federal Reserve is debating cutting back the $85 billion in bonds it is purchasing each month to keep borrowing costs low and stimulate the economy.

Last month, receipts at auto dealerships rose 1.8 percent after advancing 1.4 percent the prior month. Excluding autos, sales were flat after rising 0.3 percent the prior month.

Sales at building materials and garden equipment suppliers fell 2.2 percent, the weakest reading since May last year.

Factory Growth Accelerates

Growth in New York state's manufacturing sector accelerated in July as new orders and employment improved, a report from the New York Federal Reserve showed on Monday.

The New York Fed's "Empire State" general business conditions index rose to 9.46 from 7.84 in June, topping expectations for 5.00. A reading above zero indicates expansion.

The report's new orders index rebounded into positive territory to plus 3.77 from minus 6.69 the previous month, while its gauge on inventories was less negative at minus 6.52 from minus 11.29.

Employment gauges were encouraging but remained weak in July. The index for the number of employees stepped up to 3.26 from zero and the average employee workweek index moved to minus 7.61 from minus 11.29.

The outlook for firms showed optimism with the index of six-month business conditions rising to 32.01 from 24.98.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

Contact Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More