US retail sales unexpectedly fall in July

Retail sales excluding automobiles, gasoline, building materials and food services fell 0.4% last month after a downwardly revised 0.4% increase in June. Economists had forecast these so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, rising 0.3% after a previously reported 0.5% increase in June.

Consumer spending, which accounts for more than two-thirds of the economy, increased at a 3.2% annualized rate in the second quarter. The economy grew at a 1.5% pace last quarter.

WASHINGTON, Aug 14 (Reuters) - U.S. retail sales unexpectedly fell in July after recent strong gains that were fueled by large tax refunds, but consumer spending is likely to remain supported by rising wealth from the stock market even as households are increasingly sensitive to higher prices.

Retail sales dropped 0.6% last month after an unrevised 0.2% gain in June, the Commerce Department's Census Bureau said on Friday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, edging up 0.1%. Estimates ranged from a 0.5% drop to a 0.7% increase.