U.S. Retail Sales Defy Forecasts and Drop in June

by Christopher Freeburn | July 16, 2012 1:58 pm

U.S. consumers pulled back from spending[1] last month as fears over the troubled job market grew.

The Commerce Department said on Monday that retail sales in June dropped 0.5%, the third consecutive monthly decline, disappointing economists who had expected a rise in retail sales, Reuters noted.

Economists had anticpated a retail sales increase of 0.2% for June, which would have reversed a 0.2% decline in May.

Consumer spending at department stores fell 0.7% in June, while furniture retailers saw sales contract 0.8%.

The Commerce Department data prompted negative revisions in projected economic growth from analysts at Wall Street firms including Credit Suisse (NYSE:CS[2]), Morgan Stanley (NYSE:MS[3]) and Goldman Sachs (NYSE:GS[4]).

Credit Suisse cut is estimate for U.S. second-quarter growth from 2% to 1.6%.

Retail stocks also fell the sting of June’s unexpectedly-poor numbers. Shares of Target (NYSE:TGT[5]), Wal-Mart (NYSE:WMT[6]) and Kohl’s (NYSE:KSS[7]) slipped fractionally in Monday afternoon trading, while shares of discount retailer J.C. Penney (NYSE:JCP[8]) fell almost 2%. Shares of Macy‘s (NYSE:M[9]), on the other hand, rose slightly.

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