US retail sales dip in July

| August 13, 2009 | 0 Comments

The US economy has surprised analysts again, this time by announcing a dip in retail sales for the month of July.

The fall of 0.1% for July follows two months of gains, according to the Commerce Department.

Analysts described the figures as disappointing as they had been expecting a rise of 0.7% in overall sales last month.

Petrol stations, department stores, electronics outlets and furniture stores all reported declines. However, on a positive note, car sales rose 2.4% as a result of the US Government’s Car Allowance Rebate System (CARS), branded the “cash for clunkers” scheme.

The poor retail sales figures came just a week after the Labor Department revealed that 247,000 jobs were lost in July in the US - much less than analysts had forecast.

Furthermore, the US Federal Reserve has talked of an upturn within the economy and said: “while economic activity is likely to remain weak for a time”, it had started to “level off”.

In a statement, the Fed said: “Conditions in financial markets have improved further in recent weeks. Household spending has continued to show signs of stabilising but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit.”

The statement by the Fed was issued as it announced it was keeping interest rates on hold at between 0% and 0.25%.

In other news today, the world’s largest retailer, Wal-Mart, reported flat second-quarter income compared with this time last year but exceeded analysts expectations.

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