WASHINGTON — A bleak report on retail sales Thursday reinforced a nagging worry of economists: Shoppers won’t spend enough to help a recovery take hold.
The figures served as a reality check for an economy that lately has appeared poised to emerge from recession and grow again.
Consumer spending powers about 70 percent of U.S. economic activity.
The “cash for clunkers” rebate program helped give auto sales their biggest jump in six months in July, but sales sank elsewhere.
Gas stations, department stores, electronics outlets and furniture stores all suffered.
Overall, sales fell 0.1 percent, the Commerce Department said, after two months of modest gains. Economists had expected a 0.7 percent increase. Excluding autos, sales fell 0.6 percent, also much worse than predicted.
Unemployment, flat wages, tighter credit, fear of layoffs and the urge to save more have caused many consumers to spend less.
Shrinking home equity and stock portfolios have compounded the problem.
As a result, “households are in no position to drive a decent economic recovery,” Paul Dales, U.S. economist at Capital Economics, wrote in a note to clients.
Even Wal-Mart, which had managed to post robust sales during the recession, reported an unexpected drop in quarterly earnings. The company faulted lower prices for groceries and other products. But it warned that the economy is also still forcing customers to scale back their purchases.
