American shoppers eased up on spending in July, bad news for a stalling economy and worse for struggling retailers.
Excluding gasoline and autos, U.S. retail sales rose just 0.1% last month from June, according to figures released today by MasterCard Advisors' SpendingPulse, which estimates spending in all forms including cash. Excluding autos, sales fell by 0.9%.
The Commerce Department releases its July spending figures Friday.
The slight month-to-month increase reported by SpendingPulse for July, excluding the two volatile elements of gasoline and autos, follows a 0.5% decline from May to June and a 2.1% drop from April to May.
Compared with a year earlier, however, July sales excluding autos and gasoline rose 1%. July's sales rose still more including gasoline 1.4% because gas price are up overall. The figures compare spending from July 4 through July 31.
With consumer spending, including major items like health care accounting for 70% of U.S. economic activity, economists watch it closely for clues to what lies ahead.
Last year, July sales fell 1.9% from the previous year, excluding both autos and gas. July's sales brought the average growth rate for May through July, excluding autos and gas, to 1%, from a year earlier. That's much slower than the previous three months' 3.5% pace.
Excluding only autos, spending growth for May through July also slowed, to 1.6%. The previous three months saw a growth rate of 6.5%. 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.
Along with aggregate spending data, analysts are studying the second-quarter earnings results that major retailers are releasing this week and next for a sense of shoppers' behavior.
Macy's Inc. reported Wednesday that its second-quarter net income surged as it benefited from a 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 Co.
Economists surveyed by Thomson Reuters predict that the government figures, excluding autos, will rise a slim 0.3% in July from June.