Retail sales fell in June for the third straight month, the longest run of consecutive drops since 2008 when the country was mired in recession.Sales slipped 0.5 percent, with declines across a wide swath of industries from electronics and cars to building supplies, the Commerce Department said on Monday. Analysts had expected a small increase.
"Evidence is increasingly clear that the U.S. economy is slowing," said Jim Baird, an investment strategist at Plante Moran Financial Advisors in Kalamazoo, Michigan.
The report adds to a spate of soft economic data that is raising pressure on President Barack Obama ahead of his November re-election bid. Republican challenger Mitt Romney is focusing his campaign on the weak economy, which has plagued Obama's presidency.
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 sank.
Fed Chairman Ben Bernanke will testify to lawmakers on Tuesday and Wednesday on the Fed's view of the economy.
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 eased monetary policy this summer to prop up their economies.
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.
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.