Dive Brief:

• Retail sales slowed in June, when they were expected to rise, a sign that the recovery may be under some stress, according to a monthly report from U.S. Commerce Department released Tuesday. Overall retail sales at stores and restaurants fell .3% from May to $442 billion. Excluding autos, sales fell .1%, and excluding autos and gasoline, they fell .2%.

• The numbers for May and April were also revised downward: Retail sales increased 1% in May, down from the 1.2% first reported, and April’s .2% increase was flattened to zero.

• Apparel sales and home goods and furniture sales took a particular hit in June, with apparel sales down 1.5% from May and home goods down 1.4%. But electronic stores saw their biggest increase (1%) since September.

Dive Insight:

Overall, the Commerce Department’s retail sales report shows continued hesitation in consumer spending that could reflect consumer caution and/or a sign that the improved economy isn’t doing much to adequately improve wages. That could change as wage increases kick in later this year.

But the home goods and furniture numbers — plus the bump in electronics — are a sign that consumer priorities may also be changing, and many observers attribute that to the particular priorities of millennial-age consumers. 

That could mean that, longer term, department stores and apparel stores could have a an existential problem, Ashley Lutz at Business Insider points out. Macy’s CFO Karen Hoguet, for example, recently said in a call with investors that “customers are buying other things,” including most things that Macy’s doesn’t sell.

"I think part of that is the customers are buying other things, whether the electronics, cable services, Netflix, whatever," Hoguet said. "Shoppers are spending more of their disposable dollars on categories we don't sell, like cars, healthcare, electronics, and home improvement.”