Unusually cool summer weather and higher gas prices stifled business at many of the nation's big retailers last month, giving the overall industry a lethargic sales performance.

As retailers reported July results Thursday, the disappointments cut across industry sectors, with discounters like Wal-Mart Stores Inc. (WMT), many department stores and some apparel merchants among those falling short of expectations. An equally mixed group — J.C. Penney Co. Inc. (JCP) , Neiman Marcus Group, Inc. (NMG), Saks Inc. (SKS), AnnTaylor Stores Corp. (ANN), and Limited Brands (LTD) — were among those whose sales met or beat analyst expectations.

The results, a significant change from the solid sales the industry saw from January through May, raise questions about consumers' willlingness to spend as they pay more for fuel and other necessities, and as interest rates rise.

"It does seem to be a mixed but weak month," said Michael P. Niemira, chief economist at The International Council of Shopping Centers (search). "Everything from economic factors to weather pushed down sales."

Niemira's sales tally of 71 retailers for June was up only 2.9 percent, the weakest performance since last June, when the index rose 2.4 percent. The latest reading was short of Niemira's already reduced forecast of 3 percent to 3.5 percent.

The International Council of Shopping Centers-UBS tally is based on what the industry calls same-store sales, or business at stores open at least a year. Those sales are considered the best indicator of a retailer's health.

Excluding results from Wal-Mart, Niemira's tally would have been up 3.4 percent.

Wal-Mart, the world's largest retailer, said unseasonably cool weather held sales back, but it is also struggling with the effects of rising gasoline prices. Wal-Mart Stores said same-store sales rose 2.2 percent in June from a year ago. Analysts surveyed by Thomson First Call expected 3.6 percent.

Wal-Mart also forecast that July same-store sales will be up a modest 2 percent to 4 percent.

What is still unclear is whether retail sales are falling into another slump. From January through May, merchants enjoyed an average same-store sales gain of 6 percent after a difficult 2003.

Niemira said he believes it is unlikely retailers will repeat June's performance, but he predicted sales will slow to a more sustainable rate of 4 percent for this year. How much consumers will spend depends on the health of the labor market, he said.

"That will be the real trend driver," he said.

In an encouraging sign, the Labor Department (search) reported Thursday that the number of people signing up for first-time jobless benefits fell last week to the lowest level in more than three years. New applications for unemployment insurance dropped by a seasonally adjusted 39,000 to 310,000 for the week ending July 3. That was the best performance since Oct. 8, 2000.

Still, job recovery has been bumpy. Job growth slowed last month as the nation's payrolls added only 112,000 jobs, less than half the number economists expected.

Carl Steidtmann, chief economist at Deloitte Research, believes that even with solid job growth, this is the "beginning of a slowdown in consumer spending." He added that the effects of mortgage refinancing and tax refunds are "all going away," taking away from "consumers' ablity to spend."

In other retailers' reports, Target Corp. said its same-store sales rose 2.3 percent, below the 3.5 percent analysts predicted. Total sales gained 8.1 percent.

Limited Brands had a 19 percent increase in both same-store sales and total sales. Analysts expected a 14 percent increase in same-store sales.

AnnTaylor Stores Inc. said its same-store sales rose 11.9 percent, better than the 6.7 percent forecast. Total sales were up 27.1 percent.

But Gap reported same-store sales were down 2 percent, well off the estimate of a 4.1 percent gain. Total sales were unchanged.

High-end department stores including Nordstrom Inc. and Neiman Marcus Group again posted strong sales gains.

Nordstrom had a 5.7 percent increase in same-store sales, a solid showing although it fell below the 6.3 percent forecast. Total sales rose 8.5 percent.

Neiman Marcus' same-store sales rose 13 percent, better than the 9 percent Wall Street projection; total sales gained 13 percent.

Saks, which operates Saks Fifth Avenue and moderate-priced department stores including Proffitt's and McRae's, had a same-store sales gain of 8.5 percent, better than the 5.6 percent analysts expected. Total sales rose 9.9 percent.

Penney reported a same-store sales gain of 4.8 percent in its department store business, in line with estimates. Total sales rose 3.6 percent.

But Federated Department Stores Inc. posted a disappointing 3.4 percent increase in both same-store and total sales. Analysts projected a 4 percent same-store gain.

Terry J. Lundgren, Federated's chairman and CEO, said apparel sales were slow, particularly in the Northeast and Midwest due to lower than normal temperatures.

Sears, Roebuck and Co. had a 3.1 percent decrease in same-store sales in its domestic business, while analysts expected a 1.1 percent increase. Total sales fell 4.4 percent.

May Department Stores Co. reported same-store sales were up 1.9 percent, slightly below the 2 percent Wall Street estimate. Total sales rose 2.5 percent.

Selected same-store sales for May for other leading retailers:

— Abercrombie & Fitch, same-store sales fell 5 percent; total sales rose 13 percent.

— Dillard's, same-store sales fell 1 percent; total sales 1 percent.

— Pacific Sunwear of California, same-store sales rose 7 percent; total sales were up 17.4 percent.