Retail sales were little changed in July, the worst performance in six months, as tepid wage growth restrained U.S. consumers.
The slowdown in purchases followed a 0.2% advance in June, the Commerce Department reported. The median forecast of 82 economists surveyed by Bloomberg News called for a 0.2% gain. Excluding cars, sales rose 0.1%.
Job growth has yet to stoke the type of wage gains needed to boost household purchases, a sign the economic expansion will probably not sustain the second-quarter pickup into the end of the year. Some retailers must rely on promotions and discounts to entice customers, whose spending accounts for about 70% of the economy.
“We’re seeing decent but not great consumer spending,” Christopher Low, chief economist at FTN Financial said. “Credit is limited and wage growth is stagnant.”
Estimates in the Bloomberg survey ranged from a decline of 0.1% to a 0.6% gain. June’s reading was unrevised.
Eight of 13 major categories showed an increase in sales last month, paced by clothing, grocery and personal-care stores.