Why U.S. Consumers are Headed Downstream

LEGO Store Calendar June 2010 - Front (Photo credit: TooMuchDew)

Retail sales slipped for the third straight month in June, falling 0.5 percent according to theCommerce Department. Retail sales in May fell 0.2 percent. Most stock advice and analysts were expecting a gain of 0.2 percent in June. The last time retail sales fell for three consecutive quarters was in late 2008.

U.S. consumers are being battered on many fronts: a weak housing market, a stagnant labor market and a decline in wages. The Thomson Reuters/University of Michigan index, a measure of U.S. consumer confidence, fell to 72 in July from 73.2 in June. Lower gasoline prices, one factor that usually boosts consumer spending, were not enough to lift retail sales in June. The 1.8 percent decrease in prices at the pump also contributed to the weaker-than-expected retail number. Department store spending fell 0.7 percent in June, motor vehicle and part sales dropped 0.6 percent and sales of electronics and furniture both slipped 0.8 percent.

Howard Davidowitz, chairman of Davidowitz & Associates and a longtime retail consultant, says he was not shocked by Monday's retail report. ... Continue to read.

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