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Originally published September 13, 2013 at 6:30 AM | Page modified September 13, 2013 at 7:05 AM

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U.S. retail sales rise 0.2 percent in August

Americans bought more cars, furniture and electronics in August, but held back on most other retail purchases.

AP Economics Writer

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WASHINGTON —

Americans bought more cars, furniture and electronics in August, but held back on most other retail purchases.

The Commerce Department says spending at retail businesses rose 0.2 percent last month, the smallest gain in four months. Excluding volatile spending on autos, gas and building supplies, sales increased just 0.2 percent, or less than half July's 0.5 percent gain.

The modest retail sales gain suggests consumers may be growing more cautious about spending, which could slow economic growth in the July-September quarter. Retail sales are closely watched because they're the government's first look at consumer spending, which accounts for 70 percent of economic activity.

Sales of autos and furniture both jumped 0.9 percent. Electronics and appliance sales rose 0.8 percent. But clothing sales dropped 0.8 percent and sporting goods sales also fell.

Last week automakers reported that their sales in August topped 16 million at an annual pace for the first time since November 2007, just before the recession began. Toyota, Ford, Nissan, Honda, Chrysler and General Motors all posted double-digit gains over last August.

But many retailers have said in recent weeks that shoppers have been reluctant to spend freely for back-to-school shopping. According to a tally of 10 retail chains by the International Council of Shopping Centers, sales rose 3.6 percent last month. That's down from a 6 percent gain for in August 2012.

Job gains have been steady this year. But the pace of hiring has been too weak to rapidly lower the unemployment rate, which is 7.3 percent four years after the Great Recession officially ended.

Americans are also seeing little growth in their wages. At the same time, they are grappling with higher taxes this year. The combination has limited their spending power and kept the economy from accelerating.

In July, consumer boosted their overall spending just 0.1 percent, after their income rose by the same sluggish amount.

The tepid July gain in consumer spending has fueled worries that growth could slow in the July-September quarter to an annual rate of roughly 2 percent. That would be down from the 2.5 percent annual rate from April through June.

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