U.S. retail sales declined in July for the first time in five months, but the dip was smaller than expected and was driven by sagging demand for motor vehicles. Meanwhile, U.S. import prices soared for a fifth-straight month in July, a government report showed, pushing annual growth to a record high as rising energy, materials and food prices as well as the soft U.S. dollar made overseas products more expensive. But the worst may be over, with the latest declines in energy prices, as well as the strengthening dollar, likely to lead to falling import prices in coming months, which should help reduce overall price pressures. Retail sales decreased by 0.1 percent, the Commerce Department said Wednesday. Economists surveyed by Dow Jones Newswires had estimated a 0.4 percent decrease. The last time sales fell was in February, when demand tumbled 0.5 percent. Sales were revised upward for June, increasing 0.3 percent; originally, Commerce said June sales rose 0.1 percent. The retail sales report is a key indicator of U.S. consumer spending, a big driver of the economy. Consumer spending makes up about 70 percent of gross domestic product, the broad measure of economic activity in the U.S. Pulling down overall retail sales were U.S. sales of automobiles and parts, which plunged 2.4 percent in July, Wednesday's data showed. June sales fell 2.1 percent. Consumers are shunning trucks and SUVs in favor of smaller, more fuel-efficient models. Furthermore, the weak economy and housing slump are restraining big purchases.
