US retail sales fail to rise in August

| September 15, 2011 | 0 Comments

There is further evidence of a slowdown in the world’s largest economy after retail sales stagnated last month.

Sales were flat from the month earlier after July’s figure was revised down to 0.3% from 0.5%.

August’s figure was also worse than expected after car sales fell and excluding this item, sales rose just 0.1%.

However, compared with a year ago, sales for the month were 7.2% higher.

Consumer spending is closely monitored as it accounts for more than two-thirds of the US economy.

One analyst said the figures are disappointing for an economy that is already struggling.

Growth in the US economy has slowed sharply in the first half of 2011 and pressure is mounting on the Federal Reserve to do more to stimulate growth.

The economic recovery in the US remains sluggish in the face of higher unemployment and a depressed housing market.

Recent figures showed the unemployment rate to be at 9.1%. The Labor Department revealed the economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.

This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.

President Barack Obama recent unveiled a plan for job creation. He unveiled a $450 billion (£282 billion) package aimed at boosting the economy and reducing the federal deficit.

The bill includes tax cuts to workers and small businesses to boost job creation.

Mr Obama has previously said job creation is a top priority; continued high unemployment could threaten his prospects for re-election next year.

In related news, the latest Beige Book report, published by the Federal Reserve revealed widespread signs that US economic growth continues to slow.

The US central bank has previously said the economy is weaker and that policymakers will explore ways to boost growth and lower unemployment at its policy meeting later this month.

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