WASHINGTON (Reuters) - Sales at retailers fell for a second straight month in June on weak receipts at automotive dealers and gasoline stations, further evidence the economic recovery has slowed in the past few months.
Retail sales slipped 0.5 percent after a 1.1 percent drop in May, the Commerce Department said on Wednesday. Analysts had expected a drop of just 0.2 percent in June.
The report was a latest in a series of weak data -- from homes sales to factory activity to hiring -- to suggest the recovery from the most severe recession since the 1930s is softening a bit earlier than economists had expected.
"You have seen a little bit of cooling on the consumer side of the ledger," said Kevin Flanagan, chief fixed income strategist at Morgan Stanley Smith Barney in Purchase, New York. Still, he said a "double dip" recession did not appear in the cards.
The broad Standard & Poor's 500 index <.SPX> opened lower, although the tech-heavy Nasdaq <.IXIC> rose modestly on better-than-expected results from Intel Corp. U.S. Treasury debt prices were higher.
After strong gains in the first quarter, consumer spending is losing steam as households grapple with a 9.5 percent unemployment rate and sluggish income growth. In June, earnings slipped as employers trimmed working hours.
Slackening demand may already be making businesses wary of building inventories, an exercise that has been largely behind the economic recovery that started in the second half of 2009.
Business inventories barely rose in May as sales fell for the first time since March 2009, the Commerce Department said in a second report.
The sluggish recovery and lofty unemployment have become a headache for President Barack Obama and his fellow Democrats on Capitol Hill, who face a struggle to maintain majorities in the House of Representatives and Senate in November elections.
Republicans charge that Obama's efforts to stimulate the economy have failed, although the White House argued on Tuesday that the $862 billion stimulus plan it backed has saved or created 3 millions jobs.
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