Friday, August 6, 2010

Shoppers are choosy in shaky economy

With the economy only limping along, Americans again are being picky at stores, many of them buying only at deep discounts because they can't shake uncertainty about their jobs.
Retailers around the country posted a sales increase of just 2.8 percent for July over a year earlier — and at that time, the economy looked much bleaker than it does today.

The July figure, released Thursday by the International Council of Shopping Centers based on results from 31 chains, was the fourth straight month of weak retail numbers. For the most part, economists were disappointed.

Without more jobs, Americans probably will remain cautious with their spending, restraining the economic rebound, they said. But without more spending, companies probably will be slow to hire.

"To break out of this, we need both employment and consumption to come up together," said Nigel Gault, an economist at IHS Global Insight.

Today, the government will release its snapshot of the nation's job market for July, and no one expects anything strong. Private companies are expected to have added 90,000 jobs for the month, not nearly enough for healthy economic growth.

The overall figure is expected to show a loss of 65,000 jobs for July, because of the end of temporary positions with the U.S. Census Bureau. Unemployment is not expected to budge much from its current 9.5 percent, and may rise.

"With limited hiring by the private sector, it is becoming increasingly difficult for the recovery to be sustained," said Andrew Gledhill, an economist at Moody's

The stock market finished just about flat a day ahead of the jobs report.

Initial jobless claims rise

In a reminder of how weak the job market is, the government said Thursday that first-time claims for unemployment benefits rose last week to their highest level in four months.

Claims rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have now risen twice in the past three weeks.

Economists closely watch initial jobless claims because they are considered a gauge of the pace of layoffs and an indication of employers' willingness to hire. And even at a time when profits are coming back, businesses aren't very willing.

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