U.S. retail sales were flat in August, a potentially worrying sign that Americans are increasingly wary as unemployment remains high and the recovery weak.
Separately, U.S. wholesale prices were flat last month, pointing to moderating inflation pressures and giving the Federal Reserve more leeway to try and boost the economy.
Retail and food services sales were virtually unchanged from the previous month at an adjusted $389.50 billion U.S., the Commerce Department said Wednesday.
Economists surveyed by Dow Jones Newswires had forecast a 0.3% increase. July retail sales were revised down to a 0.3% gain. The Commerce Department originally estimated 0.5%.
Retail sales are an important indicator of consumer spending, typically a major driver of economic growth.
Higher food and energy prices crimped purchasing power earlier this year. Now many Americans are still spending heavily on fuel but cutting back elsewhere.
Wednesday's data showed a 0.3% decline for auto and parts sales. Excluding cars, overall retail sales were up 0.1%. Clothing, furniture, restaurant and department store sales also dropped. Electronics and appliance, sporting goods, grocery, building material and non-store retailers -- a category that includes online sales -- all posted gains.
Businesses are fighting for customers in a tough environment, with some established retailers struggling.
Best Buy Co. said Tuesday that its fiscal second-quarter profit fell 30% and projected lower earnings for the current fiscal year as the consumer-electronics retailer continues to battle a weak economy and strong competition.
The index of producer prices, which measures how much manufacturers and wholesalers pay for goods and materials, was unchanged in August from July as lower energy costs offset higher food prices, the U.S. Labor Department said Wednesday. Wholesale prices rose a monthly 0.2% in July and dropped 0.4% in June.
Underlying prices, which strip out volatile food and energy components and are considered a more reliable indicator of inflation trends, increased by only 0.1%.
Economists polled by Dow Jones Newswires were expecting overall producer prices to remain flat, while underlying prices were seen up 0.2%.
The tame inflation report gives the Federal Reserve more leeway to try and boost the economy by easing credit. Concerns have risen that an already weak U.S. economy could suffer from the government's inability here to agree on a jobs stimulus and Europe's deepening debt crisis. Fed officials are considering new unconventional steps to revive the recovery and, though divided, seem increasingly likely to try and ease credit when they next meet Sep. 20-21.
Wednesday's report showed that energy goods prices fell 1.0% in August, the third monthly decline, led by lower costs for liquefied petroleum gas, as well as gasoline and diesel fuel.
Passenger car prices dropped by a monthly 0.4%. Supply chain disruptions related to Japan's earthquake earlier this year had led to a surge in auto and parts prices.
Declines in oil and other commodity costs are filtering through to other goods. The price of intermediate materials, supplies and components fell by 0.5%, the first monthly drop in more than a year.
