US retail sales fell in June, marking the first time they have declined for three straight months since the height of the financial crisis in late 2008.
The 0.5pc drop last month was marked by waning demand for goods ranging from furniture to electronics as Americans retrenched in the face of weak wage growth, a slowing jobs market and persistent fears over Europe’s debt crisis.
For the second quarter as a whole, retail sales fell at an annual pace of 0.8pc compared with an increase of 6.7pc in the first three months of the year when the country’s jobs market showed signs of improvement.
With the consumer again cutting back, the report raised fears among some economists that the US could slide back into recession.
“The report offers no quarter for those looking for good news for the US consumer,” said David Semmens, an economist at Standard Chartered. Nine of the 13 categories covered by today’s report from the Commerce Department showed declines, with essential categories such as food among the handful to buck the drop.
Wall Street had been expecting a gain of 0.2pc.
The weakness of the report will bring into even sharper focus tomorrow’s appearance by Federal Reserve chairman Ben Bernanke before Congress.
Mr Bernanke has consistently argued that monetary policy can still help the economy. Investors from around the world will be looking for signs he is moving towards introducing more stimulus.
Chris Low, an economist at FTN Financial, said the fresh evidence that millions of Americans are struggling may prove enough to persuade other top officials at the central bank to support a third round of quantitative easing, or printing money.
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