A drop in sales at US chain stores last week, extending a downward trend that began in early March, is fueling concerns that consumer spending may be cooling off even as the US economy stages a rebound, industry analysts say.
Because consumer spending held up strongly during the last recession, the current economic recovery is not getting the sort of boost from pent-up consumer demand that usually propels the economy back into solid growth, analysts say.
Consumer spending accounts for two-thirds of US economic activity
US retail sales slipped 1.7 per cent last week, the Bank of Tokyo-Mistubishi and UBS Warburg reported today in their weekly report, more than offsetting the prior week's 1.4 per cent gain.
"The recent drop is worrying because although analysts expected a modest fall-off in sales following a strong start for the year, the slowdown in spending has been consistent over the past two months," said Mr Mike Niemira, senior economist at BTM.
Wal-Mart said its sales last week hit the low end of its expectations as dreary weather through much of the United States kept spring seasonable items lingering on shelves.
But the world's largest retailer kept its forecast for April sales at stores open at least a year - or "same-store" sales - unchanged, calling for a rise in the low- to mid-single digit percentage range.