U.S. retail sales fall in June

U.S. retail sales dropped unexpectedly in June, dampening optimism for a strong rebound in consumer spending in the second quarter.

Retail sales went down 0.3 percent last month from the previous month, compared to a revised-down 1 percent increase in May, said the Commerce Department Tuesday. On a year-on-year basis, sales went up 0.6 percent.

The decline in June was broad-based, with motors, furniture, building materials and clothing sales falling by more than 1 percent. Excluding volatile categories such as autos, sales declined 0.1 percent, compared to 0.8 percent increase in May.

Retail sales account for about one-third of consumer spending, the main engine of the economic activity. Many Federal Reserve officials expect consumer spending will pick up growth pace in the coming months, with lower energy prices, improved labor market, and potentially faster wage growth. Endite