WASHINGTON - Retail sales in the U.S. rose less than forecast in August as the biggest part of the economy struggled to gain momentum.
The 0.2 percent increase was the smallest in four months and followed a revised 0.4 percent July gain that was bigger than previously estimated, the Commerce Department reported today in Washington. The median forecast of economists surveyed by Bloomberg called for a 0.5 percent advance. Sales excluding motor vehicles rose 0.1 percent.
Higher payroll taxes, limited job gains and restrained income growth are discouraging consumers, whose spending accounts for about 70 percent of the economy. Today’s report is one of the last pieces of data before next week’s Federal Reserve meeting, at which policy makers will consider whether to dial back record monetary stimulus.
“The consumer continues to tag along slowly but surely,” said Eugenio Aleman, a senior economist at Wells Fargo Securities LLC in Charlotte, N.C. Wells Fargo economists are the top forecasters of retail sales in the last two years, according to data compiled by Bloomberg. “We have to see better job growth, better income growth.”
Stock-index futures were little changed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in December rising less than 0.1 percent to 1,678.4 at 8:48 a.m. in New York.
Estimates of the 85 economists in the Bloomberg survey ranged from gains of 0.2 percent to 0.9 percent after a previously reported 0.2 percent increase in July.
Eight of 13 major categories showed increased sales last month, led by auto dealerships, electronics outlets and furniture stores. Purchases of building materials, clothing and sporting goods fell.
The gain in retail sales excluding autos followed a 0.6 percent rise in July, today’s report showed. They were projected to increase 0.3 percent last month, according to the Bloomberg survey median.
Automobile dealer receipts climbed 0.9 percent after a 0.5 percent drop the prior month.
Cars and light trucks continue to be a bright spot in the economy, selling in August at the fastest annualized rate since November 2007, according to data from Ward’s Automotive Group. Sales at General Motors Co., Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. all exceeded analysts’ estimates.
Purchases excluding autos, gasoline and building materials, the figure used to calculate gross domestic product, rose 0.2 percent after a 0.5 percent increase in the previous month.
Fed officials begin a two-day meeting on Sept. 17 and will consider when to begin scaling back $85 billion in monthly bond purchases intended to spur employment and the economy.
Companies created 169,000 jobs last month, fewer than economists projected, and gains in the previous two months were revised down. Unemployment fell to 7.3 percent, the lowest since December 2008, as workers left the labor force. August and July were the weakest back-to-back months for payroll gains in a year.
The slower progress in employment has also been accompanied by limited income growth. Disposable income, or money left over after taxes, increased 0.8 percent in July after adjusting for inflation, according to the Commerce Department. In 2012, it rose 2 percent.
At clothing chains, spending fell 0.8 percent, today’s report showed. General merchandise stores posted a 0.2 percent decline.
Some higher-end retailers including fashion accessory designer Michael Kors Holdings Ltd. and home furnishings outlet Restoration Hardware Holdings Inc. are reporting strong traffic at their stores.
Restoration Hardware, based in Corte Madera, Calif., is part of a $143 billion furnishings business that caters to the more affluent spender. The company is planning a series of design centers to showcase more of its furnishings, fixtures and textiles, said Carlos Alberini, co-CEO.
“In many cases we are bringing new customers in, but also we are seeing that our existing customers are buying more of what we are offering,” Alberini said at a Sept. 11 conference. “In all these cases, there is pent-up demand in our customer base for these type of products that we are about to offer.”