CALABASAS, CA-Consumers’ contribution to economic growth shows signs of slowing as retail sales dipped for the third consecutive month. So says a recent research report from Marcus & Millichap. According to the firm’s Hessam Nadji, managing director of research and advisory services, this is a surprising trend that hasn’t occurred in nearly four years.

Core retail sales remain at healthy levels, 8% higher than their pre-recession peak, but the pattern of monthly declines implies a growing hesitancy on the part of consumers and correspondingly lower confidence,” says Nadji. “Consumer confidence fell three points in July, on the heels of a 6.5 point plunge in June, to the lowest level recorded this year.” In addition, he says, “the cooling labor market and slower wage gains reflect a corporate bias toward caution in response to lower growth expectations and uncertainty.”

According to the Marcus & Millichap report, June retail sales totaled $401.5 billion, representing a 0.5% monthly decline from May, but they remain 3.8% above year-ago levels. Core retail sales, which excludes the highly volatile auto and gasoline segments, declined by 0.2% for the month, the report notes, but also exceeded last year’s figures by 3.5%.

Nonstore retailers, dominated by online stores, represented a bright spot, says the report, achieving 0.5% growth over the last month. “Food and beverage stores, and clothing and accessories stores also garnered modest monthly gains in June,” Nadji points out. “All other categories posted declines for the month.”

Despite the downward monthly trend, most retail components remain at least 5% ahead of last year, with only department stores and electronics and appliance stores reporting annual revenue declines of 3.2% and 1%, explains Nadji.

The loss of momentum in the labor markets, flattening trajectory of wage growth, and economic and political uncertainty appears to have ushered in the second quarter’s downward trend in consumer spending, according to Nadji.

The downturn in several economic indicators that influence demand for industrial properties, such as retail sales and production, could eventually constrain demand for industrial space, according to the report. “Thus far, however, the sector has maintained good momentum with dwindling vacancy aided by low levels of new supply,” says Nadji, noting that vacancy is forecast to tighten to 11% by year end. “Looking forward, pending legislation with bi-partisan support that allows states to tax online retailers would effectively eliminate ecommerce site’s 5% to 10% pricing advantage over brick-and-mortar retailers. Consumers would absorb higher prices, but the tax would contribute significant revenues to state coffers. To regain a competitive advantage, Amazon, and likely its online rivals, plans to offer same-day delivery, which requires more strategically located warehouses across the country.”