Meanwhile, U.S. companies paid less for raw materials and factory goods in June, a separate report from the Labor Department showed. The decline in wholesale prices was driven by the steepest fall in energy prices in nearly two years. Gas prices dropped by the most since May 2010.
Still, businesses and motorists are paying nearly a dollar more per gallon than they were a year ago. That has forced many consumers to forgo discretionary purchases. Growth in retail sales has slowed since February - around the time that gas prices began to surge.
"Consumers are fatigued," said Chris Christopher, an economist at IHS Global Insight. "The only real good news on the consumer side of the economy is that gasoline prices started to fall, but are still relatively high."
Another potential problem: Businesses may have to cut orders in the coming months after adding to their stockpiles for 17 straight months. Sales across all levels of businesses fell in May for the first time in nearly a year, the Commerce Department said in a fourth report Thursday. Fewer sales are a sign that companies may have overestimated consumer demand.
JPMorgan economist Michael Feroli said the bank had lowered its growth forecast for the nation's economy for July-September from 3 percent to 2.5 percent based on the latest data on stockpiles.
The economy would need to grow 5 percent for a whole year to bring down the unemployment rate by one percentage point. Economic growth of just 3 percent a year would hold the unemployment steady and keep up with population growth.
"Clearly the recent stalling in employment growth has forced households to be a bit more careful with their cash," said Paul Dales, senior U.S. economist with Capital Economics.
