Retail sales in the U.S. were flat in July, dampening optimism over the strength of the economic recovery, official data showed on Wednesday. In a report, the U.S. Commerce Department said that retail sales were flat last month, disappointing expectations for a 0.2% increase. Retail sales for June rose by 0.2%. Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Core retail sales, which exclude automobile sales, eased up by a seasonally adjusted 0.1% in July, below forecasts for a 0.4% increase. Core sales in June advanced by 0.4%. Core sales correspond most closely with the consumer spending component of the government’s gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth. Following the release of the data, the U.S. dollar turned lower against the euro, with EUR/USD rising 0.07% to trade at 1.3379, compared to 1.3364 ahead of the data. Meanwhile, the outlook for U.S. equity markets was modestly higher. The Dow indicated a gain of 0.35%, the S&P 500 pointed to a rise of 0.45%, while the Nasdaq 100 indicated an increase of 0.45%.