A pedestrian carries a shopping bag while walking along Broadway on April 16, 2012 in New York City.
A pedestrian carries a shopping bag while walking along Broadway on April 16, 2012 in New York City. - 
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Jeremy Hobson: Now to the news this morning from the Commerce Department that retail sales are down for the third straight month -- they slipped a half percent in June.

And that's where we'll start now with Julia Coronado who is chief economist with the investment bank BNP Paribas. She joins us live. Good morning.

Julia Coronado: Good morning.

Hobson: What do you make of this?

Coronado: Well, I must warn you, economics is not known as the "dismal science" for nothing. This is a very worrisome report. So we're not seeing the resiliency in consumer spending that we saw last fall -- when we were worried about a double-dip -- and yet consumers surprised us by keeping on spending. This time around, consumers are actually pulling back their spending fairly aggressively and it's quite worrisome.

Hobson: And it's sort of surprising because gas prices have been lower; you'd think that people would have a little extra cash to go out and spend.

Coronado: Exactly. And that's why it was such a surprise this morning. We were looking for a bounce because of falling gas prices; that means consumers generally can spend a little bit more on other things. And they're not -- they're actually spending less on other things. So they're spending less on pretty much everything.

Hobson: So do you chock that up to just a weak job market, or what?

Coronado: It could be the weak job market; it could be worries about the fiscal issues that are getting a lot more attention. It could be ongoing concern about the global situation that we hear so much about. A lot of things are weighing on consumers' minds right now.

Hobson: And Julia, we've been getting some good news out of the housing market the last couple of weeks. That does seem to fly in the face of that a little bit.

Coronado: It does. The housing market's been the bright spot, finally, after years of looking so bad, we are starting to see prices stabilize; a little bit of sales. But I guess the question we want to worry about is: if consumers aren't willing to buy clothes, how long are they going to be willing to buy homes?

Hobson: Julia Coronado, chief economist with the investment bank BNP Paribas, thanks as always.

Coronado: It's a pleasure.

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