Gayle Strickland Jones shops for back-to-school supplies for fifth-grade son and seventh-grade daughter at Staples in Chestnut Hill Plaza in Delaware, Del. Consumers spent less on autos, clothing and furniture, leaving retail sales unchanged in August. The lack of growth in retail sales during a month of wild stock market fluctuations may increase recession fears.By CHRISTOPHER S. RUGABER and MARTIN CRUTSINGER, AP Economics Writers
WASHINGTON – U.S. consumers grew more cautious last month amid wild stock market swings, zero job growth and heightened concerns that the economy has weakened.
Retail sales were flat in August. At the same time, wholesale inflation leveled off. The latest data could give the Federal Reserve more impetus to adopt additional stimulus next week.
“The combination of those two reports sets the stage for, and warrants, additional action by the Fed,” said Michelle Meyer, an economist at Bank of America Merrill Lynch.
Wall Street looked past the weak retail sales data. Growing optimism that European leaders would be able to contain their debt crisis drove stocks higher. The Dow Jones industrial average closed up 140 points for the day.