NEW YORK (TheStreet) -- The biggest problem with the recovery has been its failure until recently to generate many middle-wage jobs.
The latest data illustrate one way that problem is hurting Main Street, and the stocks of retailers that serve middle-income families. But the damage may not last.
The Commerce Dept. said Wednesday that retail sales were little changed in July, and rose only 0.1% even after excluding sometimes-volatile results from car and car-parts dealers, whose sales declined 0.2%. That missed the consensus forecast of 0.3% growth.
The problem was that sales at general merchandise stores, including department stores, got hurt badly, dropping 0.5%. The news came as mid-priced department store chain Macy's
(M) reported that it missed second-quarter profit estimates and lowered its sales forecast for the full year, saying it hasn't made up the shortfall from the cold winter. Macy's shares dropped 5%.
The market may make too much of the data in the short term, Regions Financial chief economist Richard Moody said. General merchandise stores had a relatively strong June, and consumers' next spending blitz was never likely until August, when back-to-school sales lure customers, he said.
"Consumers mostly took July off to gear up for back-to-school shopping in August," Moody said in an e-mail. "I had low expectations for July and why I do not read too much into today's data."
For now, retailers still look like they are split between better performance at the high and low end of the market, and weaker performance in the middle. While some experts think the split may reflect low confidence in the recovery, it may have more to do with the kind of jobs that have been created -- until recently.
The recovery has been notably short on middle-income jobs, Moody's Analytics chief economist Mark Zandi said last month.