By Timothy R. Homan
Sept. 12 (Bloomberg) -- Sales at U.S. retailers excluding car dealers probably dropped in August for the first time in six months as Americans retrenched in the face of mounting job losses and record foreclosures.
Non-auto purchases fell 0.2 percent after a 0.4 percent gain the prior month, according to the median of 76 estimates in a Bloomberg News survey. A separate report may show wholesale prices dropped in August for the first time this year.
Consumer spending, which accounts for more than two-thirds of the economy, is faltering as wages haven't kept pace with inflation and the effect of the government's tax rebates fades. Americans are also confronting declining property values and stock prices, indicating even the recent retreat in fuel costs may not be enough to boost sales.
``People are going to remain cautious,'' said Russell Price, a senior economist at H&R Block Financial Advisors Inc. in Detroit. ``You have the two factors of the waning impact from the fiscal stimulus checks as well as the growing impact of job losses.''
The Commerce Department's sales report is due at 8:30 a.m. in Washington. Estimates excluding autos ranged from a drop of 0.6 percent to a 0.6 percent gain.
The first increase in vehicle sales since January probably brought overall purchases up 0.2 percent after a 0.1 percent drop in July, according to the survey median. Lower gasoline prices probably curtailed spending at service stations, reducing overall sales, economists said.
The Labor Department may report at the same time that producer prices in August fell 0.5 percent, according to the survey median, reflecting the decline in fuel costs. That would compare with a 1.2 percent rise the prior month, when oil prices reached a record.
Wholesale Prices
Excluding food and fuel, so-called core prices rose 0.2 percent after increasing 0.7 percent in July, according to the survey.
A 10 a.m. report from Reuters/University of Michigan is projected to show consumer sentiment climbed this month as gasoline prices retreated. The group's preliminary reading for September rose to 64, a point higher than the prior month. The index reached an 18-year low of 56.4 in June.
Automakers boosted incentives in August to revive demand as the economy lost jobs for an eighth straight month and the unemployment rate reached a five-year high of 6.1 percent.
General Motors Corp. offered all customers the same prices paid by employees, helping boost sales in the second half of the month. GM this month said it will extend the incentive through September and has offered 72-month, no-interest financing on some vehicles since late June.
`A Recession'
``Not only is the U.S. in a recession, but the rest of the world is slowing down,'' Ford Motor Co.'s Chief Executive Officer Alan Mulally said in a speech this week. ``I've never seen anything quite like it.''
A decline in gasoline prices in August may have pushed down filling station receipts in the retail sales report. The average pump price of a gallon of regular gasoline dropped to $3.76 last month from $4.06 in July, according to AAA.
Weakening demand at merchants such as Gap Inc., Target Corp. and Abercrombie & Fitch Co. also hurt total purchases, signaling merchants may be heading for the worst back-to-school season in seven years.
Sales at stores open at least a year climbed 1.7 percent in August, the smallest gain in five months, the International Council of Shopping Centers said last week. Purchases from July through September, retailing's second-biggest season after Christmas, may climb 1 percent, according to the ICSC. That would be the smallest gain since 2001.
Rebates Fade
``By July, essentially all the rebates had already been distributed, and so were no longer providing support to incomes,'' Goldman Sachs Group Inc. economist Seamus Smyth said in a note to clients on Sept. 2. ``Combined with weak job growth and tight credit, consumers had no way to fund additional consumption.''
Consumer spending will stall from July to September, three months earlier than predicted last month, according to the median estimate of economists polled from Sept. 2 to Sept. 9. The slump will slow growth to less than half the prior quarter's pace.
Bloomberg Survey
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PPI Retail RetailU of Mich
Sales ex-autos Conf.
MOM% MOM% MOM% Index
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Date of Release 09/12 09/12 09/12 09/12
Observation Period Aug. Aug. Aug. Sept. P
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Median -0.5% 0.2% -0.2% 64.0
Average -0.5% 0.3% -0.2% 64.2
High Forecast 0.2% 1.1% 0.6% 67.0
Low Forecast -1.2% -0.5% -0.6% 61.0
Number of Participants 77 80 76 67
Previous 1.2% -0.1% 0.4% 63.0
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4CAST Ltd. -0.8% 0.0% 0.6% 65.5
Action Economics -0.9% 0.3% 0.0% 66.0
AIG Investments -1.2% 0.1% -0.3% 65.0
Aletti Gestielle SGR -0.8% 0.2% -0.6% 64.0
Allianz Dresdner Economic --- 0.0% --- ---
Argus Research Corp. 0.2% 0.2% 0.6% 64.0
Banc of America Securitie -0.6% 0.4% -0.2% ---
Bank of Tokyo- Mitsubishi -0.5% 0.9% 0.1% 66.6
Bantleon Bank AG -0.6% 0.5% -0.3% 63.8
Barclays Capital -0.5% 0.4% -0.2% 64.0
BBVA -0.5% -0.1% 0.0% 67.0
BMO Capital Markets -0.3% 0.4% -0.1% 64.0
BNP Paribas -0.5% 0.5% -0.2% 65.0
Briefing.com -0.3% 0.7% 0.2% 65.0
Calyon -0.4% 0.8% 0.2% 64.0
CFC Group --- 0.1% -0.2% 63.9
CIBC World Markets -0.5% 0.5% -0.3% ---
Citi -0.1% 0.3% -0.1% 64.0
ClearView Economics -0.5% 0.4% 0.2% ---
Commerzbank AG -0.8% 0.1% -0.3% 65.0
Credit Suisse -0.7% 0.4% -0.2% 63.0
Daiwa Securities America -0.7% -0.1% -0.2% 63.5
Danske Bank -0.6% 0.3% -0.3% 64.5
DekaBank --- 0.3% -0.1% 65.0
Desjardins Group -0.5% 0.3% -0.2% 64.5
Deutsche Bank Securities -1.0% 0.2% 0.0% 61.0
Deutsche Postbank AG -0.4% 0.3% -0.1% 64.5
Dresdner Kleinwort -0.5% 0.1% 0.0% 64.0
DZ Bank -0.3% 0.1% -0.1% 63.5
First Trust Advisors -0.9% 1.1% -0.4% 64.0
Fortis -1.0% 0.3% --- 65.0
FTN Financial -0.5% 0.0% -0.4% 62.0
Global Insight Inc. -0.5% 0.6% -0.1% 66.0
Goldman, Sachs & Co. -0.3% 0.3% -0.5% ---
H&R Block Financial Advis -0.5% 0.0% -0.3% 63.0
Helaba -1.0% 0.1% -0.4% 64.5
High Frequency Economics -0.7% 0.4% -0.1% 66.0
Horizon Investments -0.3% 0.2% -0.1% 64.0
HSBC Markets -0.4% 0.3% -0.1% 65.0
IDEAglobal -0.5% 0.3% 0.2% 63.0
ING Financial Markets -0.8% 0.3% -0.2% 64.0
Insight Economics -0.6% 0.1% -0.3% 64.0
Intesa-SanPaulo -0.6% 0.0% -0.3% 65.0
J.P. Morgan Chase -0.3% 0.4% -0.2% 63.5
Janney Montgomery Scott L -0.7% -0.4% -0.4% ---
JPMorgan Private Client -0.2% 0.1% -0.2% 63.5
Landesbank Berlin -0.7% -0.5% -0.4% 64.0
Landesbank BW -0.5% 0.2% --- 64.5
Lehman Brothers -0.3% 0.2% -0.4% 64.0
Lloyds TSB -0.2% 0.2% 0.1% 63.5
Maria Fiorini Ramirez Inc -0.6% 0.4% -0.2% 64.5
Merk Investments -0.4% 0.1% -0.2% 63.9
Merrill Lynch -1.0% 0.1% -0.4% 61.0
MFC Global Investment Man -1.0% 0.2% -0.3% 64.0
Moody's Economy.com -0.3% 0.3% -0.4% 64.0
Morgan Stanley & Co. -0.4% 0.2% -0.1% ---
National Bank Financial -0.4% 0.2% -0.2% 64.5
National City Corporation 0.1% 0.8% 0.4% 64.9
Natixis -0.5% 0.3% -0.4% 64.0
Newedge -0.6% 0.0% -0.2% 63.9
Nomura Securities Intl. -0.2% -0.2% -0.3% ---
Nord/LB -0.8% 0.9% 0.0% 63.5
Okasan Securities -0.7% 0.0% -0.3% ---
PNC Bank -0.2% 0.5% 0.1% ---
RBS Greenwich Capital -1.2% 0.2% -0.5% 65.0
Ried, Thunberg & Co. -0.6% 0.4% -0.2% 62.5
Schneider Trading Associa -0.5% -0.5% 0.0% 63.8
Scotia Capital -0.8% 0.1% -0.3% ---
Societe Generale -0.5% 0.3% 0.0% 65.0
Stone & McCarthy Research -0.5% 0.1% -0.6% 63.5
TD Securities -0.5% 0.0% -0.3% 65.0
Thomson Financial/IFR -0.4% 0.2% 0.1% 65.0
UBS Securities LLC -0.3% 0.4% -0.4% 64.0
Unicredit MIB -0.5% 0.3% --- ---
University of Maryland -0.1% 0.1% 0.2% 63.5
Wachovia Corp. -1.0% 0.4% 0.1% ---
Wells Fargo & Co. -0.6% 0.2% 0.0% 63.0
WestLB AG -0.5% 0.1% -0.1% 63.5
Westpac Banking Co. -0.8% 1.0% -0.5% 65.0
Wrightson Associates -0.6% 0.4% -0.2% 62.5
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To contact the reporter on this story: Timothy R. Homan in Washington thoman1@bloomberg.net
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