Poor Weather Leads to Drop in US Consumer Spending

Unusually cool weather and poor Father's Day sales led to a sharp drop in retail sales in June with the National Retail Federation’s (NRF) Retail Sector Performance Index (RSPI) falling to its lowest level for a year.

“Lackluster sales in June had retailers feeling a little cautious," said NRF President and CEO Tracy Mullin. "We expect to see a rebound in July as summer clearance sales pick up and the beginning of the back-to-school season gets into gear."

According to retail executives, customer traffic (45.3), average transaction per customer (43.8) and employment (46.7) held back industry growth in June, the NRF said.

There were many positive signs that this would be a short-term trend as retailers still showed strong pricing power (62.5) and inventory control (51.6).

"Executives are not letting one bad month affect their business plans," said Mullin. "Pricing power remains strong which demonstrates that retailers are not overreacting with unplanned markdowns that eat away at profits."