WASHINGTON — Retail sales grew modestly in late July and August, with stores in parts of the country, notably the Philadelphia area, lowering expectations after a disappointing back-to-school season, according to the Federal Reserve.
The Beige Book report released Wednesday, an anecdotal take on business conditions in the Fed’s 12 districts, found that overall economic activity continued to expand. However, the Boston, New York, Philadelphia, Kansas City and Dallas districts showed a deceleration in that expansion.
Consumer spending slowed across most of the country, dragged down by sluggish sales in the automotive and housing areas. A number of regions also reported that high energy prices appear to have hurt consumer demand.
In Chicago, the survey said: “High gasoline prices reportedly dampened spending again in the district, both by squeezing budgets and by leading shoppers to make fewer trips to the stores.”
Retail sales in nine districts were seen as “growing modestly,” while the Richmond and St. Louis areas had weak or declining sales and Cleveland showed a mixed result.
In the Philadelphia area, b-t-s sales have not been as strong as expected.
“Apparel sales, in particular, have been softer than anticipated,” said the report. “Store executives indicated that discounting has been widespread. Looking ahead, area retailers have subdued forecasts. They believe consumer confidence has weakened and they expect consumers to limit discretionary spending in the months ahead.”
Consumer spending was up slightly in the Minneapolis area, where a North Dakota mall manager described b-t-s sales as solid.
In San Francisco, sales grew somewhat for department stores and assorted specialty stores, though retail sales growth in the district was modest overall.
In a broader sense, economists are keeping a close eye on the strength of the housing market, which has an impact on consumer spending habits. Also of macroeconomic interest is the employment scene, especially since people base at least some purchasing decisions on how comfortable they feel in their jobs. The Fed’s survey found that labor markets generally have been steady or expanding moderately, except for “brisk” growth in Kansas City and an acceleration in the Richmond district.
“Virtually all districts reported declines in home sales, as well as in residential construction activity,” said the report. “Moreover, most districts indicated substantial increases in the inventory of unsold homes.”