U.S. retail sales grew just 0.2% in August, the smallest gain in four months and well below economists’ expectations of a 0.5% lift. The report, released Friday by the Commerce Department, showed August growth about half the level of gains in July. Lingering unemployment and stagnant wage gains held down consumer spending, which accounts for 70% of the US economy.
Auto sales were the chief driver of the gains in August. Auto dealer receipts climbed 0.9% for the month, following a 0.6% decrease in July. Excluding autos, retail sales grew just 0.1% in the month, far below expectations and far below the level of gains in July.
Five years ago this month, the Lehman Brothers bank collapsed, publicly triggering the financial crisis. After years of stimulus, deficit spending and injections of liquidity from the Federal Reserve, the economy remains, essentially, flat.
Later this month, the Fed is expected to begin reducing the amount of stimulus it pumps monthly into the market. It had hoped the economy at this point would be strong enough to continue growing without its stimulus. August retail sales show that is overly wishful thinking.