Washington, DC, July 14--Retail sales reversed course in June, taking a surprisingly sharp drop as the auto sector showed considerable weakness.
Retail sales decreased 1.1% in their largest fall in 16 months, the Commerce Department said Wednesday. Sales in May rose 1.4%, revised up from a previously reported 1.2% gain. Economists had forecast a 0.7% decline for the month, with sales up 0.2% if auto sales were excluded.
The 4.3% drop in auto demand -- the biggest decline since February 2003 -- helped drive overall June sales lower. Without the auto component, retail sales would have gone down just 0.2%. Auto sales in May had climbed 3.2%.
June's 1.1% decline matched a drop of an identical size in February 2003. Some analysts have attributed weakness at retail outlets to higher energy prices and very rainy weather in parts of the nation during June.
The report showed gasoline station sales last month declined 0.9%, the biggest drop since October's 1.1% decline.
There were decreases in some sales categories in June.
Furniture stores rose by 1.1%, electronic store sales increased 0.5% and building materials and garden stores inched up by 0.1%. Sales at non-store retailers, which includes Internet and mail-order shopping, went up 0.7%. Sales at health and personal care stores rose by 0.2%.
Restaurant sales fell by 0.8%. Sales at clothing stores dropped 0.5%. General merchandise store sales declined 0.2%. Food and beverage store sales dipped 0.1%. Year over year, overall retail sales were up by 6.3% in June.
