Big-ticket spending slows retail sales
WASHINGTON — Americans boosted their spending at retail businesses only modestly in August, indicating that economic growth remains sluggish. Consumers bought more cars, furniture and electronics last month but held back on most other purchases.
Spending at retail businesses rose just 0.2 percent last month, the Commerce Department said Friday. It was the smallest gain in four months. But the government said retail spending was stronger in the previous month than first estimated, revising the July estimate to 0.4 percent from 0.2 percent
Excluding volatile spending on autos, gas and building supplies, sales in August increased just 0.2 percent, or less than half of July's 0.5 percent gain.
Consumers may be growing more cautious about spending, a trend that could slow economic growth in the July-September quarter. Slow wage growth, modest job gains and higher taxes have limited Americans' spending power.
Retail sales are closely watched because they're the government's first look each month at consumer spending, which accounts for 70 percent of economic activity.
“Consumer spending remained stuck in middle gear in the summer,” said Sal Guatieri, an economist at BMO Capital Markets.
Guatieri forecasts that spending is growing at an annual rate of roughly 2 percent in the current July-September quarter, about the same as the previous quarter. That suggests economic growth is slowing to an annual rate of about 2 percent, down from the 2.5 percent annual rate that the government estimated for the April-June quarter.
Most economists said the retail sales figures are likely healthy enough for the Federal Reserve to begin cutting back its monthly bond purchases when it meets next week. The Fed is buying $85 billion in Treasury bonds and mortgage-backed securities each month to keep interest rates low and spur more borrowing and spending.
Sales of autos and furniture both jumped 0.9 percent in August. Electronics and appliance sales rose 0.8 percent. But clothing sales dropped 0.8 percent and sporting goods sales also fell.
Last week automakers reported that their sales in August topped 16 million at an annual pace for the first time since November 2007, just before the recession began. Toyota, Ford, Nissan, Honda, Chrysler and General Motors all posted double-digit gains over last August.
But many retailers have said in recent weeks that shoppers have been reluctant to spend freely for back-to-school shopping. According to a tally of 10 retail chains by the International Council of Shopping Centers, sales rose 3.6 percent last month. That's down from a 6 percent gain for in August 2012.
Job gains have been steady this year. But the pace of hiring has been too weak to rapidly lower the unemployment rate, which is 7.3 percent four years after the Great Recession officially ended.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Hospitals, doctors in Pa. received $32M in 5 months from drug, medical device companies
- Google Pittsburgh instrumental in fight against hackers, co-directors say
- Retirement planning is about more than just money
- EPA says greenhouse gas releases from wells, pipelines decline
- Education spending helps to widen wealth gap
- Trib 30 index of Pittsburgh-area stocks falls in September
- LNG exports get federal approval from Dominion’s Cove Point terminal
- Shareholders cheer eBay’s decision to spin off PayPal
- ‘Tug of war’ takes effect on stocks as market logs 3rd monthly drop for 2014
- Western Pa. unemployment rate holds steady in August
- Study: Wellness programs don't save money, but employee health improves