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Listless consumers put the brakes on August spending
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The department also revised down to 0.3 percent a healthy 0.5 percent gain in sales originally reported for July.
While some special factors, such as early shopping for back-to-school clothes and the impact of Hurricane Irene on the East Coast, may explain some of the weakness, Mr. Vitner said it mostly reflects the lack of jobs and incomes to fuel spending growth.
The massive loss of confidence seen in measures of consumer sentiment last month took a particularly big toll on big-ticket purchases such as autos, which make up about half of all retail sales, he said.
“It’s hard to see what would kick auto sales into a higher gear,” he said. “Consumers seem to be reluctant to make major purchases until the job market firms. The credit is there, the confidence is not.”
National Retail Federation President Matthew Shay agreed that a lack of confidence is holding back spending.
“Consumers may be waiting for good news in terms of employment and market stability,” he said. They are only “cautiously spending on things they need and thinking twice about things they want.”
James Goldstein, an analyst at CreditSights, said that luxury retailers such as Nordstrom’s were less affected by the economic troubles — surprisingly, since the high-income consumers who shop there in general are more exposed to turmoil in the stock market.
“The challenge is in midtier department stores and in consumers that lack the deeper pockets seen in luxury stores,” he said.
High-end retailers showed considerable resilience, despite “a tumultuous August — complete with stock market swoons, declining consumer confidence and both a hurricane and an earthquake striking fear up and down the East Coast.”
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