WASHINGTON (AP) — Consumers spent less on autos, clothing and furniture, leaving retail sales unchanged in August. The lack of growth in retail sales during a month of wild stock market fluctuations may increase recession fears.
The Commerce Department says retail sales showed no growth in August and demand in July was weaker than first thought.
Auto sales fell 0.3 percent. Sales at clothing stores declined 0.7 percent. Gasoline sales rose.
Stocks future rose in early morning trading, tracking European markets higher ahead of a meeting on Greece’s debt troubles.
The flat reading for retail sales was a surprise given private reports from retailers and auto dealers that suggested a brighter picture in August.
Major automakers reported healthy sales increases in August, largely because dealers introduced new models and offered cheaper financing. The nation’s major retailers reported solid results from the all-important back-to-school shopping.
A weak month for retail sales suggests growth may struggle to gain momentum in the second half of the year. Consumer spending accounts for 70 percent of U.S. economic activity.
The overall economy expanded at an annual rate of just 0.7 percent in the first six months of this year, the slowest growth since the recession ended two years ago. Employers added no net jobs in August, and the unemployment rate stayed at 9.1 percent.
High unemployment and a spike in gasoline prices earlier this year had forced many consumers to be more cautious.
Consumers are feeling less confident after a rocky summer. Lawmakers fought over raising the federal borrowing limit, Standard & Poor’s downgraded long-term U.S. debt, and stocks have fluctuated wildly after plunging in late-July and early August.
The Federal Reserve said last month that it expects the economy will stay weak for the next two years. As a result, the Fed said it planned to keep interest rates very low until at least mid-2013, assuming the economy remained weak.
Fed officials will meet next week to consider other steps to support to the economy.