US retail sales decline in August

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US retail sales fell unexpectedly in August, the second monthly decline in succession, increasing concerns about the state of the domestic economy.

Sales declined 0.3% last month said the Commerce Department, which also revised July's fall to 0.5% from the 0.1% it had first estimated.

August's weak figure was a surprise for analysts who had predicted a 0.3% rise.

Retail analyst Chris Rupkey said the latest figure "sounds the death knell for the consumer".

'Digging a whole'

"It looks like consumer spending is retrenching, not only retrenching but digging a new hole," said Chris Rupkey, analyst, Bank of Japan-Mitsubishi.

I would be very surprised to see consumer spending in positive territory in the third quarter Chris Rupkey, analyst, Bank of Japan-Mitsubishi

While the most recent US economic growth data showed that the economy expanded at an annual rate of 3.3% in the three months from April to June, much of that rise was contributed to by American exporters.

By contrast, domestic consumer spending is being hit by a number of factors, such as higher unemployment, rising energy and food bills and a sharp decline in the housing market.

Sales of cars and other vehicles rose 1.9% in August - the first increase since January - following a 4.3% drop in July.

However, August's sales were still 13.5% lower compared with the same month last year.

Excluding motor sales, core retail sales fell 0.7% in August after rising 0.3% in July.

Mr Rupkey said he expected consumer spending to continue to fall.

"I would be very surprised to see consumer spending in positive territory in the third quarter," he said.