A senior economist in the U.S. says consumers have lost enthusiasm, saying retail sales are maintaining their growth, though not like before.
With limited opportunities in employment, higher taxes on payrolls and restrained growth in income, consumers’ desire to go out and shop is being tested.
The new data from a leading group studying retail sales followed an August report that showed smaller than anticipated increases. That helped to send Treasuries higher on thoughts the Federal Reserve policy makers next week will not pull back as much as originally thought on their bond purchasing that is aimed at giving the economy a boost.
American businesses could find some relief in the global economy, which is showing signs of starting to pick up. Economists increased growth estimates in the UK gross domestic product from an early projection of 1% to 1.3% for 2013 and from 1.7% to 2% for 2014.
The forecast for U.S. retail sales called for a growth of 0.5%. In July, the increase was 0.2%, while estimates had been for a gain of between 0.2% and 0.9%.
Eight of the 13 categories showed an increase in August, with auto dealerships leading and furniture stores, electronic outlets following said the Department of Commerce. Building material purchases, sporting good and clothing dropped. Sales, not including autos, were up just 0.1% following an increase 0.6% during July.
Officials at the Federal Reserve meet on September 17 and 18 and will be considering scaling back on the $85 billion of bond purchases monthly.
In August, companies added 169,000 jobs, fewer than projected by economists, while unemployment dropped to 7.3%, its lowest figure since late 2008. July and August were the two weakest consecutive months for new job gains in 12 months.
The slow progress in new jobs has accompanied limited growth in income with little money left over after taxes and monthly expenses.