American shoppers dug in their heels in July, bad news for the stalling economy and worse for struggling retailers.
Excluding gasoline and autos, U.S. retail sales rose a meager 0.1 percent last month from June, according to figures released Thursday by MasterCard Advisors' SpendingPulse, which estimates spending in all forms including cash. Excluding autos, sales fell by 0.9 percent.
The Commerce Department releases its July spending figures Friday.
The tepid month-to-month increase reported by SpendingPulse for July, excluding the two volatile elements of gasoline and autos, follows a 0.5 percent decline from May to June and a 2.1 percent drop from April to May.
Compared with a year earlier, however, July sales excluding autos and gasoline rose 1 percent. July's sales rose still more including gasoline—1.4 percent—because gas price are up overall. The figures compare spending from July 4 through July 31.
"It's growth, but it's pretty weak growth," said Kamalesh Rao, director of Economic Research for SpendingPulse.
With consumer spending—including major items like health care—accounting for 70 percent of U.S. economic activity, economists watch it closely for clues to what lies ahead.
Last year, July sales fell 1.9 percent from the previous year, excluding both autos and gas. Rao said volatility in gas prices means that excluding both autos and gasoline offers a better sense of consumer activity.
July's sales brought the average growth rate for May through July, excluding autos and gas, to 1 percent, from a year earlier. That's much slower than the previous three months' 3.5 percent pace.
Excluding just autos, spending growth for May through July also slowed, to 1.6 percent. The previous three months saw a growth rate of 6.5 percent.
The year-over-year comparisons are not seasonally adjusted, but the month-to-month figures are.
Bright spots remained in online sales, electronics, airlines and lodging as Americans devoted their limited dollars to summer travel.
Clothing, jewelry and luxury sales were weak.
In addition to aggregate spending data, analysts are studying the second-quarter earnings resultsthat major retailers are releasing this week and next for a sense of shoppers' behavior.
Macy's reported Wednesday that its second-quarter net income surged as it benefited from a new focus on exclusive moderate-price fashions and from tailoring each store's merchandise to its local market. But Macy's seemed to gain only at the expense of rivals like J.C. Penney .
Economists surveyed by Thomson Reuters predict that the government figures, excluding autos, will rise a slim 0.3 percent in July from June.