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Gas Cuts Into June Sales

Washington, D.C. Retail sales increased only slightly in the month of June, as sharply rising gas station sales were offset by a record decline in auto sales, the U.S. Commerce Department said Tuesday.

Auto sales fell 3.3% in the month, the largest decline since February 2006. Excluding autos, June retail sales rose 0.8%.

Gasoline station sales saw the largest gain in the month, helped by the rising cost of oil. Sales in the category rose 4.6%, the largest gain since November 2007.

Grocery store sales rose 0.7% in the month, boosted by the rising cost of food. Sales at general merchandise stores rose 0.4% in the month.

Housing-related and other big-ticket stores, including furniture, electronics and building materials, showed declines. Furniture and home-furnishing sales fell 1.4%, the largest decline since December. Electronics and appliance store sales fell 0.6%, also the largest decline since December.

Restaurant and bar sales dropped 0.2%, according to the Commerce Department.

Economists expected government tax rebate checks to give a bigger boost to retail sales in June, despite the weak overall U.S. economy. However, much of that spending seems to be reflected in May gains. Analysts said that soaring gasoline prices, housing market declines and mounting concern about the economy continue to cut into consumer spending.

Separately, chain-store sales for the week ended July 12 rose 2.2% from the year-ago period, according to a survey released Tuesday by the International Council of Shopping Centers (ICSC) and UBS Securities. "While sales posted a moderate increase this week, sales were led by spending at grocery stores, drug stores and discounters, while electronics, jewelry and furniture stores were softer," said Michael Niemira, chief economist, ICSC.

Sales in July are expected to increase by between 2% to 3%, Niemira said.

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