US retail sales fall more as consumers spend less on restaurants and hobbies
Washington — US consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation that could diminish prospects of a third interest-rate increase from the Federal Reserve, in 2017. The soft domestic demand could also temper expectations of strong acceleration in economic growth in the second quarter. The labour department said on Friday that the unchanged reading in its consumer price index came as the cost of petrol and cellphone services declined further. The CPI’s drop of 0.1% in May and the lack of a rebound in June could trouble Fed officials who have largely viewed the recent moderation in price pressures as transitory. Policy makers are confronted with benign inflation and a tight a labour market as they weigh a third rate hike and announcing plans to start reducing the central bank’s $4.2-trillion portfolio of Treasury bonds and mortgage-backed securities. In the 12 months through June, the CPI increased 1.6% — the smallest ...
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