Retail sales in the US probably increased in June for a second straight month and factory production fell at a slower pace as the recession abated, economists said before reports this week.
Sales gained 0.4 per cent after a 0.5 per cent increase in May, according to the median estimate in a Bloomberg News survey before the Commerce Department’s report on July 14. The next day, Federal Reserve figures may show industrial output fell 0.6 per cent last month after a 1.1 per cent drop in May.
Consumers are venturing back into stores, seeking discounts and favoring necessities such as food or fuel. Even as the projected increase in sales and reports this week on housing may show the worst of the downturn has passed, a turnaround is likely to be gradual.
“The spending is more on staples than discretionary purchases,” Tom Porcelli, a senior economist at RBC Capital Markets in New York, said last week. “Aggregate demand is still amazingly weak. Things aren’t falling apart, but don’t expect a robust recovery.”
An index consumer confidence dropped last week on concerns about job losses, sending stocks lower. The Standard & Poor’s 500 Index closed at 879.13 in New York on July 10, down 0.4 per cent from the previous day, capping its fourth straight weekly loss. The Dow Jones Industrial Average closed down 0.5 per cent to 8146.52.