Americans experienced lower costs last month for some services as well as cheaper merchandise that limited receipts at retailers and showed a weaker trajectory for consumer spending entering the third quarter.
While economists projected a slight increase, consumer prices were little changed in June and held back by cheaper home furnishings, cars and clothing. Households also enjoyed modestly priced airfare and hotel stays at the start of the summer, Labor Department data showed Friday.
The discounts on merchandise may partly explain why the Commerce Department’s data on retail sales, which aren’t adjusted for prices, unexpectedly decreased for a second month.
The back-to-back decline in retail sales, the first since July-August of last year, also show consumers remain hesitant to ramp up their spending as the economy enters its ninth year of expansion.
“Consumers are cautious to spend despite the positive backdrop of upbeat job gains, rising — albeit sluggish — wage growth