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| Car sales fall hits US spending | Car sales fall hits US spending |
| (10 minutes later) | |
| Consumer spending in the US fell by 0.1% in July compared with June, driven down by a large drop in car sales. | Consumer spending in the US fell by 0.1% in July compared with June, driven down by a large drop in car sales. |
| Vehicle and parts sales fell 2.4%, their biggest monthly drop since April and down 10.5% on July 2007. | Vehicle and parts sales fell 2.4%, their biggest monthly drop since April and down 10.5% on July 2007. |
| Rising food and fuel prices are squeezing consumer spending and cutting demand for expensive items such as cars, whose running costs have risen. | Rising food and fuel prices are squeezing consumer spending and cutting demand for expensive items such as cars, whose running costs have risen. |
| However, according to the government estimates, retail sales were still 2.6% higher than in July 2007. | |
| Economists said there were signs that tax rebates had encouraged some additional spending. | Economists said there were signs that tax rebates had encouraged some additional spending. |
| "In July we saw a rebound in furniture sales and electronics after a drop in June. So the tax rebates may have helped a little, but not every aspect of consumer spending," said senior economist Gary Thayer, from Wachovia Securities. | "In July we saw a rebound in furniture sales and electronics after a drop in June. So the tax rebates may have helped a little, but not every aspect of consumer spending," said senior economist Gary Thayer, from Wachovia Securities. |
| The US government sent tax rebate checks for $168bn to most US taxpayers during the month of July to help stimulate the economy. | |
| Mixed picture | |
| The data showed a mixed picture across the retail sector. | |
| Furniture stores, which have suffered from a slowdown in the housing market, rose by 1 percent in July after a 1.2% decline in June. | Furniture stores, which have suffered from a slowdown in the housing market, rose by 1 percent in July after a 1.2% decline in June. |
| Department stores enjoyed a 0.3% rise in sales in July, but restaurants and bars suffered a 0.2% fall in sales. | Department stores enjoyed a 0.3% rise in sales in July, but restaurants and bars suffered a 0.2% fall in sales. |
| Elsewhere, department store chain Macy's said its same-store sales fell 2.1% in the three-month period to 2 August. | Elsewhere, department store chain Macy's said its same-store sales fell 2.1% in the three-month period to 2 August. |
| Its chairman Terry J. Lundgren, said the company "delivered strong second quarter earnings and cash flow, despite the poor economic environment". | Its chairman Terry J. Lundgren, said the company "delivered strong second quarter earnings and cash flow, despite the poor economic environment". |