WASHINGTON (AP) -- Retail sales in August posted the weakest showing in two months as worried consumers curbed their spending habits.þþThe Commerce Department reported that the nation's retailers saw a tiny 0.2 percent increase last month following a much bigger 1.4 percent rise in July. It was the weakest performance since sales had actually fallen by 0.5 percent in June.þþMuch of the August weakness reflected a sharp slowdown in auto sales, which edged up just 0.4 percent last month after having surged by 4.3 percent in July.þþIn another report, the Labor Department said that the number of Americans filing claims for unemployment benefits fell to 308,000 last week, down by 5,000 from the previous week. The drop pushed claims to a seven-week low.þþThe tiny 0.2 percent rise in retail sales was slightly better than analysts had been expecting. They were forecasting an outright decline in sales of 0.1 percent.þþConsumer spending, which has been the driving force in this economic expansion, slowed dramatically in the spring as consumers were battered by soaring gasoline prices, rising interest rates and a cooling housing market, which made homeowners feel less prosperous and less inclined to spend money.þþThe overall economy grew at an annual rate of just 2.9 percent in the April-June quarter after turning in a sizzling pace of 5.3 percent in the first three months of the year.þþWhile the sharp slowdown had raised concerns of a possible recession, economists have grown less concerned about that possibility because of a retreat in oil prices, which have declined significantly from their mid-July highs.þþThe decline in gasoline prices is expected to show up in stronger retail sales in coming months as consumers have more to spend on other items because they will be paying less to fill up their tanks.þþFor July, the weakness in retail sales showed up not only in the slowdown in car sales but in a 0.3 percent drop in sales at furniture stores, which have been hurt by the cooling housing market.þþSales at gasoline stations fell a sharp 1 percent, but this decline reflected the retreat in gasoline prices from levels above $3 per gallon in many parts of the country.þþSales at department stores fell by 0.2 percent while sales at general merchandise stores, the category that includes department stores, showed a 0.4 percent increase. Sales at specialty clothing stores dropped by 0.3 percent in August.þþSales at grocery stores, hardward stores and electronics and appliance stores all posted gains.þþ
Source: NY Times
