Retail Sales Disappoint Again

Sales rise less than expected in July as higher gasoline prices bite consumer spending.
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Speculation about an economic slowdown was refueled Thursday with the release of another disappointing retail sales report.

The government said sales rose 0.7% in July, less than the 1% forecasted by economists. Excluding autos, retail sales climbed just 0.2%, half the expected rate of gain. Gasoline station sales surged 18.6%, reflecting the market rally in energy prices.

On the positive side, June's overall sales decline was not as bad as originally estimated; sales fell a revised 0.5%, rather than the original 1.1% decline.

The retail sales report is the latest government report to disappoint economists. Job creation in July was minimal, following a disappointing increase in the previous month, while economic growth in the second quarter was much less than expected.

Orders for durable goods have come in lower than forecast for the past three months.

The

Fed

Tuesday cited higher oil prices as a drag on economic growth in a statement accompanying its decision on raising interest rates for the second time in about five weeks.