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August retail sales boosted by auto sales
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WASHINGTON (MarketWatch) -- U.S. retail sales in August were disappointingly weak despite a strong selling performance for cars and trucks.

Retail sales rose 0.3% in August, led by a 2.8% increase in auto sales, the Commerce Department said Friday. Excluding motor vehicles, sales fell 0.4%, the biggest decline since last September.
Sales were slightly weaker than expected, but an upward revision to July's figures -- to a 0.5% increase -- put the level of sales closer to expectations.

The soft retail figures figured in choppy morning trading in the stock and bond markets, as investors awaited a key Sept. 18 meeting of Federal Reserve policymakers on interest rates. See Market Snapshot.
Economists surveyed by MarketWatch had expected total sales to rise 0.6%, with a 0.2% increase in sales excluding autos. See Economic Calendar.
Sales were tepid outside of autos, although furniture and electronics sales showed some life. Sales at malls, grocery stores, restaurants, and garden centers were weak. Read the full report.

Along with declining factory output and falling employment reported recently, the data on retail sales show the nation's economy sagged in August, although any impact of the financial crisis raging on Wall Street was hard to discern.
"The softer retail sales numbers will make it easier for the Fed to cut rates on Tuesday," wrote Mark Vitner, economist for Wachovia. "Such a move, however, was probably already in the works."

"We cannot escape the sense of flagging momentum," wrote Stephen Gallagher, U.S. economist for Societe Generale.
However, the gains in auto and furniture sales show that "the consumer was not shying away from big-ticket items which normally require confidence and financing," he told clients.

By Rex Nutting

 
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