Tuesday, July 17, 2012
Associated Press
WASHINGTON
The outlook for the U.S. economy appeared dimmer Monday after a report that Americans spent less at retail businesses for a third- straight month in June.
The report led some economists to downgrade their estimates for economic growth in the April-June quarter. Many now think the economy grew even less than in the first quarter of the year, when it expanded at a sluggish 1.9 percent annual rate.
Spending in June fell in nearly every major category — from autos, furniture and appliances to building, garden supplies and department stores. Overall, retail sales slid 0.5 percent from May to June, the Commerce Department said.
Retail sales hadn’t fallen for three-straight months since the fall of 2008, at the height of the financial crisis.
The weak U.S. spending figures were announced on the same day that the International Monetary Fund slightly lowered its outlook for global growth over the next two years.
Stocks fell after the Commerce report was released.
Weakening retail spending could make the Federal Reserve more likely to take further steps to try to lower long-term interest rates to encourage more borrowing and spending. The Fed’s policy committee will meet at the end of this month.