Transcript for 0: US Retail Sales Go Nowhere in July
You lose. It's Wednesday August 13 the New York financial markets are open today's big number. Some big zero. US retail sales remained unchanged for the month of July in part because -- second straight month of declines in car sales. Market watchers say that was unexpected. This is the weakest showing of US buying and selling in six months hello everyone I'm Michelle Franzen -- New York here with more on his bad news Rick Newman and Yahoo! finance. Good morning Rick. -- Michelle so the Commerce Department dropped something of a bombshell this morning break down the number oral lack there. It's a small number but an important number we saw no increase in overall retail sales from June to July. Compared to a year ago retail sales are up three point 7% I think is number that's okay but inflation accounts for something like 2% of that so. Pretty weak we're just not to consumers just really are reluctant to spend money. With what we side. This or last month rather was as you said. Auto sales fell back and that's with some fairly steep discounts automakers have been. Increasing their discounts to get keep the cars moving and they've also been ramping up lending and crew including sub prime landing. And even even with that we've seen it fall back -- auto sales in the other big category that was -- was department stores. And we got some other news today from Macy's. Which had its earnings were disappointing and actually lowered their forecast for sales for the rest of the year so they were getting into the back to school season very important for retailers that's an important sign of how how health. A consumers are and the signs are not great. -- Reuters hold some economists who predicted a modest rise in July so what do you rail things just car sales. You know that there's one thing missing from the economy right now and it's that incomes are barely increasing so. We've heard pretty good news about jobs -- -- We're averaging more than 200000 new jobs per month. All the indicators pretty look look pretty good there but these did that -- catch that you don't really notice in those job numbers is that a lot of the jobs that are coming back. Pay a lot less than the jobs we lost during a recession. And families just don't have as much disposable income as they used to so. The you know we keep seeing signs that this recovery -- to pick up steam -- ought to become more robust we might get back to something like a normal economy. Six months or a year from now and the one thing that's holding that back is that incomes are just not rising. And families just are not getting ahead of inflation and many are still falling behind -- -- a step back bigger picture what does one bad month of sales really mean. -- you know it's not all gloom and doom -- other things going right. As I said we've been seeing jobs return. -- caught some economists do you think that. You drive great job growth has been strong enough that the next thing we're gonna see is wage growth that's probably the -- the most important thing to look for at this point. The idea being that the more. -- workers to come off the sidelines. We've got to kind of an oversupply of labor but as more people go back to work -- will become more scarce and companies have to pay a little bit more. In order to get recruit people -- now we just haven't seen that yet that's the theory. What we need to look for that to happen. And if that were to happen and we can get through the Fed is the Fed possibly starts to raise interest rates. Then those of those will be the two big steps we need to get over and that that's how we won't know whether we are sort of getting back today. Normal healthy economy but we're not there yet well -- you -- August has back to school -- helping -- factor might that be. It say it's a factor you know these days. Retailers are promoting sales and discounts are trying to get you shop. Just to shop as far ahead as you possibly can -- last year this time around this time we start to see the first. Advertisement for Christmas sales. So we should have seen some element of back to school spending in July obviously more in August. And it just doesn't look like consumers are spending very much -- -- not. So how are they shaving up until the last minute that has not really been the pattern but what might happen here and we did hear this from Macy's is. As as the numbers come in weaker than expected that means retailers have to discount more. We've seen that -- -- just about every year since the recession. -- -- I guess you could say this is good news for consumers who might get -- little bit of a better deal in August on some of that back to school merchandise. But we we -- you know we need retailers to be profitable and hang in there because that's an important source of jobs. Rick Newman from Yahoo! finance thanks for joining us share. You of course can keep up with the latest headlines right here on abcnews.com. You've been watching the big number I'm Michelle Franzen in New York.
This transcript has been automatically generated and may not be 100% accurate.