From an article posted at ABC News, US Retail Sales Flat in July…
“U.S. retail sales were essentially flat in July, providing evidence that consumers have yet to shed their doubts about the economy despite recent job gains.
The Commerce Department said Wednesday that seasonally adjusted retail sales were unchanged in July compared with the prior month. Total sales rose a statistically insignificant $161 million from $439.6 billion in June.
The figures suggest that Americans are hesitant to spend, which could limit growth for the economy.”
As I have written before, many economists expect the economy to grow upon job gains. However, they underestimate the capacity of capital income to reduce its own spending as the stock markets and other asset markets stall out.
So retail sales being flat was something I foresaw. The significance of this though is that economic growth will be muted, even as labor seems to be increasing its income. The problem is that capital income obtained a high level of consumption after the recovery. And capital income tends to reduce spending toward the end of a business cycle to protect their gains. Their reduction in consumption is now sufficient enough to neutralize much of the consumption gains by labor.