spending component of gross domestic product (GDP). Economists closely watch the retail-sales report because it provides the first indication each month on consumer spending, which accounts for 70 percent of U.S. economic activity. Retail sales account for about 30 percent of consumer spending. The mixed retail-sales report suggests underlying strength in domestic demand despite a weakening global economy and a slowdown in job growth over the past two months, which have diminished expectations that the U.S. Federal Reserve (Fed) will raise interest rates this year. The central bank has kept its short-term rate near zero since late 2008.
