U.S. Retail Sales Tick Up Just 0.2% as Consumers Remain Cautious

WASHINGTON (AP) -- U.S. retail sales increased slightly in June, a sign that consumers remain cautious despite steady job gains this year.

The Commerce Department says retail sales rose just 0.2% last month, held back by a sharp drop at building materials and garden supply stores. Sales also fell at restaurants and at auto dealers.

The figures suggest that Americans are reluctant to spend freely, which could slow growth in the April-June quarter. Retail sales are closely watched because consumer spending accounts for 70% of the economy.

There were some good signs: A measure of retail sales that excludes volatile categories such as gasoline rose at a solid 0.7% clip. Clothing stores, sporting goods stores and department stores all recorded sales gains.