US government figures show that the country's retail sales fell by more than expected in June for a second straight month.
These are the latest set of figures indicating that a US recovery is losing momentum.
Sales declined 0.5% from May to $360.2 billion, according to the Commerce Department. Most economists had expected sales to decline by 0.2% after a larger, revised 1.1% fall in May.
The report was a latest in a series of weak data - from homes sales to factory activity to hiring - to suggest the recovery from recession is softening a bit earlier than economists had expected.
After strong gains in the first quarter, consumer spending is losing steam as households grapple with a 9.5% unemployment rate and sluggish income growth. In June, earnings slipped as employers trimmed working hours.
Slackening demand may already be making businesses wary of building inventories, an exercise that has been largely behind the economic recovery that started in the second half of 2009.
Business inventories barely rose in May as sales fell for the first time since March 2009, the Commerce Department said in a second report.
The sluggish recovery and lofty unemployment have become a headache for US President Barack Obama and his fellow Democrats on Capitol Hill, who face a struggle to maintain majorities in the House of Representatives and Senate in November elections.
Republicans charge that Obama's efforts to stimulate the economy have failed, although the White House argued yesterday that the $862 billion stimulus plan it backed has saved or created 3 millions jobs.
