July 14--Americans held back from shopping in June, pushing down retail sales and raising doubts about consumer confidence.
Retail sales dropped 0.3% in June from the month before, the Commerce Department said Tuesday. May retail sales were also revised downward to 1%, from a previous estimate of 1.2%.
Analysts said that shoppers continued to show restraint despite an improving economy and labor market.
The report showed that motor vehicle and parts dealers, who suffered a 1.1% decline, helped drag down sales. Excluding that volatile category, retail sales fell by 0.1%.
Consumer spending makes up more than two-thirds of economic activity, making retail sales a key gauge of the nation's economic health.
Shoppers have continued to defy many economists' predictions that lower gas prices would help kick-start consumer spending. Many Americans, hampered by slow wage growth and continued worries about the economy, have chosen to bank gas savings instead of splurging, analysts say.
The labor market also remains mixed.
The unemployment rate last month dropped to 5.3%, the lowest in more than seven years -- but the drop was largely due to many workers leaving the labor force. Hourly wages were also up just 2% in June from a year ago, a slow pace of growth.
In June, eight out of 13 categories reported a sales drop.
The biggest declines hit furniture stores, which slipped 1.6%. Clothing and accessories stores fell 1.5%. Building and garden suppliers reported a 1.3% decline.
