UPDATE: U.S. Economy Appears Weaker as Retail Sales Slump
WASHINGTON (AP) -- The news that Americans spent less at retail businesses for a third straight month is prompting some economists to downgrade their estimates for economic growth in the just-completed quarter. Many now think the economy grew even less than it did in the first quarter of the year, when it expanded at a 1.9 percent annual rate. The Commerce Department says spending in June fell in nearly every major category. Retail sales hadn't fallen for three straight months since late 2008. Paul Ashworth, the chief U.S. economist at Capital Economics, says, "However hard you look, there's just no good news in this report." Weakening retail spending could make the Federal Reserve more likely to act further to try to encourage more borrowing and spending by lowering long-term interest rates. The Fed's policy committee will meet at the end of this month.
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