Sales at U.S. retailers probably rose in June for the first time in three months, reflecting a pickup in demand for automobiles that outshined spending on other goods, economists said before a report this week.
The projected 0.2 percent gain in purchases would follow a 0.2 percent decline in May, according to the median forecast of 72 economists surveyed by Bloomberg News ahead of the Commerce Department figures tomorrow. Other data may show the cost of living was little changed and manufacturing accelerated.
Receipts at merchants other than auto dealers were probably little changed as a weakening job market sapped households of the confidence and the incomes needed to boost expenditures. Federal Reserve Chairman Ben S. Bernanke will address the outlook for growth when he testifies Congress this week and may hint at steps that can be taken to revive the expansion.
“The overall consumer picture is lackluster -- still growing -- but not particularly strongly,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “The momentum in the economy has clearly waned.”
A bright spot, auto purchases have held up as Americans replace aging vehicles. Cars and light trucks sold at a 14.1 million annual rate in June, up from May’s 13.7 million that was the weakest pace of the year, Ward’s Automotive Group data show. General Motors Co., Ford Motor Co. and Chrysler Group LLC reported sales that topped analysts’ estimates, helping the industry surpass projections and stay on pace for the best year since 2007.
“We’ve got just some tremendous opportunity in the back half of the year, so feel good about where we are,” Kurt McNeil, U.S. vice president of sales at General Motors, said during a July 3 conference call. “We still see headwinds, but at the end of the day we’re calling for moderate, gradual economic growth.”
Vehicle demand is propelling manufacturing. Production at the nation’s factories, mines and utilities rose 0.3 percent in June after a 0.1 percent decrease in the previous month, economists projected a Fed report will show on July 17.
At the same time, scant income gains as the labor market struggles have failed to boost spending on other goods. Same-store sales at the more than 20 companies tracked by Retail Metrics Inc. rose 0.3 percent in June from the same time last year following a 4 percent gain in May.
The Standard & Poor’s Supercomposite Retailing Index increased 1.7 percent in June, compared with a 4 percent gain for the broader S&P 500.
Consumer spending, about 70 percent of the economy, grew at a 2.5 percent annual rate in the first quarter, according to Commerce Department data. Economists surveyed this month forecast it increased at a 1.9 percent rate from April through June while the economy as a whole expanded at a 1.8 percent pace.
Cheaper gasoline will free up some cash. The average price of a gallon of regular fuel at the pump fell to $3.33 on July 1, the lowest in six months, according to AAA, the nation’s largest auto club.
The drop in fuel costs is also showing up in measures of inflation. The consumer-price index was little changed in June after falling 0.3 percent the prior month, according to the survey median before a Labor Department report on July 17. Prices are projected to rise 1.6 percent over the past year, down from 1.7 percent in May.
Moderating price gains provide the Fed more cushion should it chose to adopt new strategies to combat 8.2 percent unemployment. Fed Chairman Bernanke will testify before the Senate Banking Committee on July 17, discussing the outlook for the economy and monetary policy. On July 18, he will speak before the House Financial Services Committee.
Employers hired 80,000 workers last month, fewer than forecast and not enough to reduce a jobless rate that’s exceeded 8 percent for more than three years, Labor Department figures showed earlier this month.
Residential real estate is one area of the world’s largest economy that shows signs of improvement. Builders began work on more houses in June than at any time since October 2008, economists projected a Commerce Department report will show on July 18.
A day later, figures from the National Association of Realtors will show sales of existing homes climbed 1.5 percent to a 4.62 million annual rate, according to the survey median.
Bloomberg Survey ============================================================== Release Period Prior Median Indicator Date Value Forecast ============================================================== Retail Sales MOM% 7/16 June -0.2% 0.2% Retail ex-autos MOM% 7/16 June -0.4% 0.0% Business Inv. MOM% 7/16 May 0.4% 0.2% CPI MOM% 7/17 June -0.3% 0.0% Core CPI MOM% 7/17 June 0.2% 0.2% Ind. Prod. MOM% 7/17 June -0.1% 0.3% Housing Starts ,000’s 7/18 June 708 745 Building Permits ,000’s 7/18 June 784 765 Exist Homes Mlns 7/19 June 4.55 4.62 Exist Homes MOM% 7/19 June -1.5% 1.5% LEI MOM% 7/19 June 0.3% -0.1% =============================================================