Pessimism grows as US retail sales data reported lower than expected results, basically remaining flat in August despite economist forecasts for an increase of 0.2 percent following a reading of a 0.3 percent gain for July.
Lack of job creation and fears of job stability kept American shoppers from spending, which highlights the risk of a stagnation in economic growth in the US economy.
A breakdown of the data shows that demand declined for big-ticket items like automobiles and furniture. Sales at clothing stores dropped 0.7 percent, the biggest decrease since December. Eight of 13 major categories showed increases last month, led by grocery and sporting goods stores.
Big store chains like Best Buy and Target blamed a sluggish labour market that is battering consumer confidence and consequently hurting sales.The dim outlook for household spending, which accounts for about 70 percent of the economy, means it will be harder for the two-year old recovery to gain speed, giving the Federal Reserve reason to take additional steps to spur the expansion.