• Bloomberg, Thursday, September 15, 2011 10:15 AM

Flat employment and limited income growth restrained demand in August, stagnating retail sales. July saw a 0.3% rise in sales, smaller than previously estimated per the U.S. Commerce Department.

Retailers are saying a struggling job market has hurt consumer confidence, and that is hurting sales. Household spending is 70% of the economy, and if that doesn't turn around the recovery will stall.

"Consumers are being more cautious, given all the economic headwinds," said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. "Policy makers have to be focused on growth because growth seems to have come close to stalling in August."

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