Car sales up, retail sales flat in June

WASHINGTON -- Consumers spent more on cars and in big chain stores last month but falling gas prices held back retail sales. Retail sales rose only 0.1 percent, the Commerce Department said yesterday. That follows a 0.1 percent decrease in May, which was the first decline after 10 straight gains.

When excluding autos, retail sales were flat in June. A rebound from spring supply disruptions stemming from the Japan crises helped push auto sales up 0.8 percent.

Sales at general merchandise stores, which include stores such as Walmart and Target, rose 0.4 percent. Falling gas prices pushed station sales down 1.3 percent. But consumers are still paying nearly a dollar more for gas than they did a year ago.

Retail sales have been slowing since February. Consumers are being more cautious about spending because of higher gas prices and a sluggish job market.

"Clearly the recent stalling in employment growth has forced households to be a bit more careful with their cash," said Paul Dales, senior U.S. economist with Capital Economics.

The economy added just 18,000 jobs last month, the fewest in nine months. The unemployment rate rose to 9.2 percent, the highest rate this year. -- AP