Retail sales chug along amid economic uncertainty

"However consumers alone can’t be expected to shoulder the burden of the economy. Fiscal and monetary policy uncertainties combined with stagnant economic and employment conditions continue to breed a volatile market with extreme swings in consumer spending. The economy can’t seem to maintain any amount of momentum. We just can’t seem to pull ourselves up.”

Even as automakers report yearly double-digit sales increases, Commerce showed that auto sales, which are seasonally adjusted, dropped 1 percent in July.

Consumer spending accounts for 70 percent of economic activity so the retail report is closely watched. 

“Spending has stalled and the economy is stuck in neutral,” said Jack Kleinhenz, NRF's chief economist. 

"Even with modest employment gains and steady consumer confidence, Americans remain in a cautiously positive spending pattern."

For retailers, results were mixed with some categories seeing solid gains while others made surprising drops, including the home-based areas. 

Department store sales were up 0.6 percent, after a 1.2 percent drop in June, clothing store sales rose 0.9 percent, grocery stores and restaurants saw a 0.6 percent boost and sales were up 1 percent at sporting goods, hobby, book and music stores.

Meanwhile, furniture stores saw sales fall 1.4 percent, building material and garden equipment and supplies dealers stores’ sales decreased 0.4 percent and electronics and appliance stores’ sales decreased 0.1 percent. 

Purchases at gasoline stations rose 0.9 percent, helped out by higher prices at the pump.  

Expectations are that the economy, after a lackluster first half, will perform better in the second half of the year. 

Economists are expecting to see faster growth in that last part of the year after a relatively slow start, which many argue was hampered by tax hikes and deep spending cuts.