US retail sales growth slows in June as gasoline spending falls

US retail sales slowed in June as consumers spent less at gasoline stations, Commerce Department data showed. Sales rose 0.2 percent from May to $768.6 billion, matching analysts' expectations, after a 1.0 percent increase in May.

Excluding motor vehicles and parts, sales fell 0.2 percent. The decline was led by a 5.3 percent drop in gasoline station sales as energy costs eased on hopes of a lasting ceasefire between the United States and Iran. The report said hostilities have since resumed, sending oil prices higher again.

Sales also fell at food and beverage stores and at health and personal care shops. Analysts said consumer spending still showed overall resilience. Online sales rose, partly reflecting spending linked to Amazon Prime Day and promotions by Walmart, economist Michael Pearce of Oxford Economics said.

Pearce said he had expected spending to slow around mid-year because gasoline prices remained elevated and household buffers from higher tax refunds appeared mostly exhausted. He said he still expected some moderation, although growth had remained resilient so far.

Oliver Allen of Pantheon Macroeconomics said the underlying spending trend was likely weak, citing a subdued labor market, slower income growth and a relatively low personal saving rate. He said such a slowdown would support the case for the Federal Reserve not to tighten policy.

The report linked recent energy price pressure to US-Israel strikes targeting Iran since late February and Tehran's pushback, including nearly closing the Strait of Hormuz, a key energy transport route. It said higher pump prices had added pressure on President Donald Trump's administration ahead of midterm elections this year.

Compared with June a year earlier, retail sales were 6.7 percent higher, the Commerce Department said.