Behind Weak Retail: Anxious Consumers, Scared Bosses

The surprising weakness in retail sales for June has analysts wondering just what’s on consumers’ minds when they go to the mall, or avoid the mall altogether. Excluding autos, gasoline, and building materials, retail sales growth slipped 0.1 percent month over month, writes Drew Matus, economist for UBS Investment Research. UBS had estimated a gain of 0.2 percent.

What strikes Matus is the on again/off again nature of consumer spending this year. “It’s almost as though they turn off the spigot one month and turn it on again the next month,” he says. Such behavior “doesn’t seem to be skewing with the fact that job growth has remained positive and pay has been going up for those who are employed, thanks to overtime and other factors,” he adds. “The pattern suggests a lot of uncertainty.”