Retail sales dip in July as autos weaken

WASHINGTON (Reuters) - Total sales at U.S. retailers edged down 0.1 percent in July on another big drop in auto sales, according to a Commerce Department report on Wednesday that indicated consumers were straining to keep spending up amid rising prices.

The decline in total July sales was in line with forecasts made by Wall Street economists. Auto and auto parts sales fell 2.4 percent, their biggest drop since April, after a revised 2.1 percent drop in June and were off a whopping 10.5 percent from year-ago levels.

Excluding autos, retail sales were up 0.4 percent in July, which was roughly in line with forecasts, following a 0.9 percent rise in June.

Economists said before the report was issued that spending has been supported by government stimulus checks but that was waning in July because most of the checks already have been issued. Meanwhile, prices for many food items are on the rise and there was only a slight moderation in gasoline prices during the month.

Commerce said gasoline sales in July were up 0.8 percent after a 4 percent June jump. But reflecting higher prices, gasoline sales were 24.6 percent higher than in July last year.

Excluding gasoline, retail sales in July fell 0.2 percent after a 0.1 percent June decline.

(Reporting by Glenn Somerville, editing by Neil Stempleman)