Monday, July 16, 2012
Evidence is increasingly clear that the U.S. economy is slowing.
The dollar declined against the euro and the yield on 10-year U.S. government bonds dropped to an all-time low as the data stoked worries the economy was floundering and could need more help from the Federal Reserve. U.S. stock prices were lower.
The International Monetary Fund slashed its forecast for global economic growth on Monday and urged European policymakers to take bolder action to stem their crisis. It also warned that China's economy risks a hard landing.
Job creation in the United States has slowed dramatically in the last few months as employers worry about a sagging global economy hurt by Europe's snowballing debt crisis. Bernanke's peers at central banks in China, the euro zone and Britain have cut interest rates this summer to prop up their economies.
The U.S. factory sector also has shown signs of contraction due to the global slowdown, although on Monday a survey showed New York state manufacturers perked up in July. Still, new orders shrank at the state's factories.
The retail data is worrisome because it suggests consumer spending, which drives about two-thirds of the economy, is also sagging.
A poll showed on Monday that American companies are scaling back plans to hire workers with a rising share of firms saying the European debt crisis is taking a bite out of their sales.
The Commerce Department said sales of motor vehicles and parts dropped 0.6 percent last month. Receipts at electronics and appliance stores declined 0.8 percent.
Sales at gasoline stations dropped 1.8 percent, reflecting a decline in gasoline prices.
Excluding autos, retail sales fell 0.4 percent last month. A so-called core measure of retail sales, which excludes autos, gasoline and building materials, dropped 0.1 percent.