August Retail Sales Fail to Meet Forecasts

Gain of .3% drops to .4% loss if auto sales are excluded
By Jonas Oransky,  Newser Staff
Posted Sep 14, 2007 10:47 AM CDT
Home Depot Inc., associate John Badalian demonstrates energy efficient washing machines and dryers at The Home Depot store in Glendale, Calif., in this Aug. 13, 2007 file photo. Factories saw orders for...   (Associated Press)
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(Newser) – Retail sales were up last month, but the .3% rise failed to meet expectations, and if automobile sales are excluded, sales actually fell by .4%—the steepest drop in a year. The August sales figures provide more fodder for an interest-rate cut when the Fed meets next week. “The consumer is pulling back a bit,” one analyst tells Bloomberg.

Predictions had put the August gain at .5%, Bloomberg reports, after the July retail figure was revised upwards, from .3% to .5%.  Industrial production gained 0.2%, less than economists anticipated, in a separate report from the Fed. Confidence is growing that the Fed will slash rates to ease the housing-catalyzed market slump; the benchmark target rate is expected to be cut by a quarter percentage point to 5.00.