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Retail Sales Fall 0.3% in August, U.S. Reports"
WASHINGTON -- U.S. retail sales fell 0.3% in August and the trade gap with the nation's foreign trade partners widened to a record level as well, the U.S. Commerce Department announced today.Leaving auto sales out of the equation, retail sales rose 0.2%, the government report. The 0.3% drop was 0.1% more than Wall Street analysts projected, but sales excluding autos met expectations,according to the Reuters News Service.July sales figures were revised to show a healthier economy than the Commerce Department first reported. July sales rose 0.8% overall (not 0.7%) and 0.3% (not 0.2%) when autos are left out of the picture.In a separate report, the Commerce Department said the current account gap -- the broadest measure of trade and investment flows between this country and the rest of the world -- grew even larger during the second quarter. The United States imported $166.18 billion more in goods and services than it exported, well above analysts' projected $159.13 billion shortage.The president of ClearView Economics LLC, an economics consulting firm in Pepper Pike, Ohio, Kenneth T. Mayland, points out "a calendar quirk may be responsible for diluted August [retail] sales." A late Labor Day, he writes, may have pushed school-related purchases into September. "These sales would be included in next month's report," he says. "Apparel store sales dropped 0.25% for August and general merchandise store sales dipped 0.4%."The "hottest" area of consumer spending, Mayland found, is Internet retail sales. Here sales rose 1.7% in August an 14.5% year over year. "This is about three times [his emphasis] the annual increase of traditional retailers.The chief economist of the National Retail Federation, a trade association representing the retail industry, called the August numbers "another notch in a schizophrenic summer for retail sales." Several retail sectors, said economist Rosalind Wells, saw strong sales last month, among them sporting goods, books, hobby and music stores."Don't generalize or extrapolate any one month's results," advised ClearView's Mayland. He cited early summer numbers that suggested the economy might be hitting a "soft patch." Revised numbers showed such talk was groundless.Regardless, Mayland wrote, "Even taking into account the calendar effects of back-to-school sales, there is no way [the August retail sales numbers] could be termed 'great.' Even 'good' would be a stretch. Retailers probably had to move goods the old-fashioned way -- discounting. This presents an ominous picture of what the upcoming holiday selling season might look like." "