US retail sales growth slower than expected in August

US retail sales grew at a slower-than-expected rate in August, despite increased demand for high-priced, one-off items such as cars.

Sales were up by a seasonally adjusted 0.2%, as US consumers bought fewer items of clothing, sporting goods and building materials.

Economists had expected sales to rise by 0.4%.

Sales of cars rose by 0.9% last month according to the Commerce Department, having dropped 0.5% in July.

Chris Williamson, chief economist at researchers Markit, said the figures supported the expectation that US economic growth will have slowed slightly for the third quarter of the year.

Williamson and many other economists still anticipate that the Federal Reserve will announce it is starting to reduce its $85bn a month economic stimulus at its next meeting.

Paul Dales, Senior US Economist at Capital Economics agrees. He said the retail figures, "may support a tapering of QE3 at next week's Fed meeting".

In a separate survey, the Labor Department said that US producer prices rose by 0.3% in August. They had been flat in July.