Retail sales rise less than expected in June
WASHINGTON (Reuters) - Total sales at retailers rose a less-than-expected 0.1 percent in June, as auto sales had their biggest drop in more than two years, a Commerce Department showed on Tuesday.
Auto and auto parts sales fell 3.3 percent in June, their worst month since February 2006. They tumbled 9.5 percent from a year earlier.
In Detroit, General Motors Corp. announced on Tuesday morning it would cut salaried employment costs by 20 percent, sell up to $4 billion of its assets and borrow at least $2 billion to boost its liquidity by $15 billion through 2009.
Economists polled by Reuters before the Commerce Department report had forecast total retail sales to rise 0.4 percent in June after a 0.8 percent gain in May that was initially reported as a 1.0 percent rise.
U.S. Treasury debt prices added to gains after the weaker-than-expected report, while stock index prices stayed lower on the retail sales and GM news.
Excluding autos, retail sales rose 0.8 in June, which was also below the pre-report consensus estimate of 1.0 percent. Excluding autos, building supplies and gasoline, retail sales rose 0.4 percent in June.
Economists had expected government tax rebate checks to give a bigger boost to retails sales in June, despite the weak overall U.S. economy. However, much of that appears to have been reflected in May gains.
"When you strip out food, retail is only up 0.1 percent. We are looking for the tax rebate to come through and this is disappointing. It suggests consumer retrenchment," said T.J. Marta, fixed income strategist at RBC Capital Markets in New York.
Gasoline station sales rose 4.6 percent in June as motorists faced higher prices at the pump. Over the past year, gasoline station sales have risen 24.5 percent to nearly $46 billion last month, on a seasonally adjusted basis.
(Reporting by Doug Palmer, editing by Joanne Morrison)