US consumer spending weakened in August with retail sales slowing to a near-flat level while interest rates stayed high, according to government data released today.
Overall retail sales were up 0.1% from July to August at $710.8 billion, though this beat analysts' expectations, data from the Department of Commerce showed.
Analysts had expected a 0.2% decline, according to Briefing.com.
The latest figures were bogged down by tepid sales at car dealers and gas stations, the report said.
Sales at motor vehicle and parts dealers slipped 0.1% from a month ago while those at gas stations dropped 1.2%.
Spending at food and beverage stores fell as well, as did those at furniture and clothing stores, according to the Commerce Department.
Excluding carss and gas stations, retail sales was up 0.2%.
"The consumer is getting, in my mind, less and less resilient," said Dan North, senior economist at Allianz Trade North America.
One reason is that real disposable income, referring to income after inflation and taxes, has declined - as have consumers' excess savings - North said.
But he does not expect the slower sales figure to have a major impact on the Federal Reserve's calculus this week when the central bank mulls the size of expected interest rate cuts.
"It's very clear that rate cuts are coming, the market is basically expecting (a cut of) 25 basis points," North said.
But he added that the data will be among indicators the Fed will consider as it proceeds with a gradual approach to interest rate reductions.
