WASHINGTON – U.S. consumers grew more cautious last month amid wild stock market swings, zero job growth and concerns that the economy has weakened.

Retail sales were flat in August. At the same time, wholesale inflation leveled off. The latest data could give the Federal Reserve more impetus to adopt additional stimulus next week.

“The combination of those two reports sets the stage for, and warrants, additional action by the Fed,” said Michelle Meyer, an economist at Bank of America Merrill Lynch.

In August, consumers spent less on autos, clothing and furniture, the Commerce Department said Wednesday.

Hurricane Irene disrupted sales along the East Coast, analysts said. But many consumers were also spooked after a grim July that renewed recession fears.

As a result, consumer confidence fell in August to its lowest level since April 2009, when the economy was still in recession.

Advertisement

The economy’s weakness is helping to keep prices in check.

The Labor Department said its producer price index, which measures price changes before they reach the consumer, was unchanged in August after a 0.2 percent rise in July. A drop in energy prices in August offset higher food costs.

Fed Chairman Ben Bernanke acknowledged last week that inflation rose sharply in the spring. But he repeated his belief that the increase was temporary and that price pressures would moderate soon.

Fed policymakers meet for two days next week. Many economists expect they will decide to shift money out of short-term mortgage-backed securities and into longer-term Treasury bonds.

The move could push down longer-term interest rates, including rates on mortgages and auto loans.

 


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.