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US retail sales tick up 0.2 percent in June

By WTOP Staff

CHRISTOPHER S. RUGABER
AP Economics Writer

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

Retail sales rose just 0.2 percent last month, the Commerce Department said Tuesday, held back by a sharp drop at building and garden supply stores. Sales also fell at restaurants and at auto dealers.

The figures suggest that Americans are still reluctant to spend freely, limiting growth in the April-June quarter. While employers have stepped up hiring since January, wage growth remains weak and is barely keeping up with inflation. Retail sales are closely watched because consumer spending accounts for 70 percent of the economy.

Still, economists were encouraged by some of the details in the report. A measure of retail sales that excludes volatile categories such as gasoline and autos rose at a solid 0.6 percent clip. Clothing stores, sporting goods stores and department stores all recorded decent sales gains. And a category that includes online and catalog retailers jumped 0.9 percent in June and has increased 8.1 percent in the past 12 months. That’s nearly double the 4.3 percent growth in overall retail sales in the past year.

“While the headline number for June was disappointing, there were some underlying pockets of strength,” Jim Baird, chief investment officer for Plante Moran Financial Advisors, said. “The solid advance … across numerous retail sectors suggests that consumers are spending, but doing so selectively.”

Sales at auto and auto parts dealers fell 0.3 percent, which contradicts strong data released by the automakers themselves earlier this month. The automakers had said sales reached an eight-year high in June. The two sets of data can sometimes conflict on a month-to-month basis.

Retail sales were revised higher in May to 0.5 percent from 0.3 percent, and in April to 0.6 percent from 0.5 percent.

Most analysts now expect the economy will expand at about a 3 percent annual pace in the April-June quarter, a forecast that was little changed by the retail sales report. That’s not as strong a rebound as many economists had hoped from a weak first quarter, when the economy shrank 2.9 percent, largely because of cold weather.

Economists had expected second-quarter growth of 3.5 percent rate a month ago, according to a survey by the National Association for Business Economics.

Several retailers have reported disappointing sales in the past month. Family Dollar, the Container Store and the Gap have all blamed falling sales on consumer caution. The CEO of the Container Store said the chain has been hurt by a “retail funk.”

Yet some other stores reported healthy sales gains, including the discount club chain Costco and grocery chain Kroger’s.

Purchases of large items like autos may be leaving many Americans with less money to spend on discretionary items like clothes and electronics. Rising grocery prices have likely also squeezed household budgets.

Still, employers are hiring at a healthy pace, which may give Americans more confidence to spend. Employers have added an average of 230,000 jobs a month in the first half of this year, up from 194,000 a month in 2013. That’s knocked the unemployment rate down to 6.1 percent, the lowest in nearly six years.

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Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber/

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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