US inflation flat in June while retail sales sink

A US Dollar note is seen in this June 22, 2017 illustration photo. — Reuters picA note is seen in this June 22, 2017 illustration photo. — Reuters picWASHINGTON, July 14 — Cheap energy prices kept US flat in June in another sign price pressures remain weak in the world’s largest economy, Labour Department figures showed today.

The falling price of gasoline also helped hold down US retail sales, which contracted for the second straight month in June, the Commerce Department reported separately.

Slow inflation has baffled economists given the very low unemployment rate, but the numbers come even as US central bankers continue to say they expect inflation to rebound allowing them to raise the benchmark interest rate gradually.

Analysts had expected the Consumer Price Index, which tracks the costs of household goods and services, to remain flat last month after CPI fell 0.1 per cent in May.

The less volatile 12-month CPI measure slowed three-tenths from May to 1.6 per cent, continuing a sharp a decline since February.

However, CPI excluding food and energy, categories which can see big swings, rose 0.1 per cent last month, the third straight increase. The annual core inflation rate was 1.7 per cent, the same as May but six-tenths slower than .

In the retail sector, Americans in June spent less on restaurants, bars and groceries, while the transition from department stores to online retailers like Amazon continued.

Overall retail sales fell 0.2 per cent for the month to US$473.5 billion (RM2.03 trillion), a surprise to analysts who had forecast an increase of 0.1 per cent.

Weak , which have been down in the first half of 2017, were not to blame this time: excluding that volatile category, sales were still down 0.2 per cent.

Gas stations, however, saw a 1.3 per cent drop in sales last month, a time when Americans traditionally hit the road for summer holidays pushing gasoline prices higher.

But excluding car sales and gasoline, retail sales still contracted by 0.1 per cent.

The struggling department store sector fell 0.7 per cent while online stores sales rose 0.4 per cent.

For the April-June period, sales were up 3.8 per cent over the same quarter of 2016. — AFP

Source: The Malay Mail Online

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