WASHINGTON — Retail sales weakened in June and early July, and overall U.S. economic growth slowed to “mixed’’ or “moderate,’’ according to the Federal Reserve.
The findings came after Fed chairman Ben Bernanke last week suggested that the central bank might take a breather from its 17 consecutive interest rate increases when members meet next month. The Fed is seeking to limit inflation.
“Most reports on retail sales indicated slightly weaker conditions, on balance, than earlier in the year,” said the anecdotal survey, known as the Beige Book, which draws on information from the Fed’s 12 districts. Department stores and smaller retailers had “limited” or smaller than anticipated sales gains as big-box retailers and other low-price outlets were “relatively weak.” Luxury stores, however, reported healthy sales.
“Cleveland and Chicago reported that general retail spending was held down, in part, by high gas prices, which have squeezed households’ budgets and reduced the frequency of shopping trips,” the report said.
The cash squeeze at the pump appears to be pinching consumers elsewhere, as well, such as in the Dallas district, where sales continued to cool.
“Customers are still modifying purchasing patterns because high energy costs are taking a larger share of their paycheck,” according to the survey.
Retail sales in Michigan in June were held back by “sluggish” turnover at vacation spots, though July has picked up some, said one analyst cited in the report.
In the Philadelphia district, luxury stores fared better than those focusing on low-price goods. Retailers in the area expect sales to remain slow until the back-to-school season gets under way. “Although they are uncertain about the prospects for fall, they do not see any signs that sales growth will slip from the recent pace,” said the report of Philadelphia-area
A mall manager in the Minneapolis area said recent sales were about 4 percent above a year ago, with particular strength in apparel.