U.S. retail sales were flat in July as Americans cut back buying clothing and other goods, suggesting a moderation in consumer spending that could dampen expectations of an acceleration in economic growth in the third quarter of 2016.
Despite the weakness in retail sales in July, consumer spending remains supported by a strong labour market as well as rising home and stock market prices. The economy created a total of 547,000 jobs in June and July.
Other data on Friday showed producer prices recorded their biggest drop in nearly a year in July amid declining costs for services and energy goods. Cooling consumer spending and tame inflation suggest the Federal Reserve will probably not raise interest rates anytime soon despite a strong Labour Market
A strong dollar and cheaper oil continue to keep price pressures muted, leaving inflation running persistently below the Fed's 2 percent target. Fed officials have repeatedly expressed concern about low inflation.