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Retail sales post tiny gain in June as sales plunge at auto dealerships

By MARTIN CRUTSINGER | AP Economics Writer

3:21 AM EDT, July 15, 2008

WASHINGTON (AP) _ Retail sales edged up by a weaker amount than expected in June as sales at auto dealerships plunged.The Commerce Department reported Tuesday that retail sales increased by just 0.1 percent last month, even weaker than the 0.4 percent gain that analysts had been expecting.

That small rise reflected a 3.3 percent drop in sales at auto dealerships, highlighting the troubles the U.S. auto industry is facing with a weak economy and soaring gasoline prices.

Overall retail sales were supported by a big 4.6 percent jump in sales at gasoline stations, an increase that largely reflected the huge jump in pump prices.

Excluding the big drop in auto sales, retail sales would have shown an increase of 0.8 percent last month.

Underscoring the mounting troubles in the U.S. auto industry, General Motors said Tuesday that it plans to lay off salaried workers, cut truck production and suspend its stock dividend as it adjusts to a declining U.S. market.

GM said it would also borrow $2 billion to $3 billion as part of an effort to raise $15 billion to help turn around its North American operations.