Consumers curb spending as energy, food prices rise

WASHINGTON - After splurging in July, America's shoppers spent more modestly in August amid higher energy prices and job losses.

Sales at the nation's retailers rose by 0.6 percent last month, following a brisk 1.3 percent sales increase registered in July, the Commerce Department reported Friday.

Although August's sales performance was weaker than the 1.5 percent gain that economists were forecasting, analysts said consumers are still spending at a healthy pace and are keeping their wallets and pocketbooks sufficiently open to help along the economy's recovery.

Excluding sales of automobiles, which can swing widely from month to month, sales at all other merchants rose by 0.7 percent in August - close to economists' predictions for a 0.8 percent rise.

In a second report, higher energy and food costs helped to boost wholesale prices 0.4 percent in August, following a 0.1 percent increase in July, the Labor Department said.

Energy prices shot up 1.2 percent last month, mostly because of a 6.3 percent jump in gasoline prices. Food prices rose 0.7 percent last month, compared with a 0.2 percent dip in July. Higher energy and food prices can put a strain on some households' budgets, leaving them with less money to spend on other things, economists said.

Concerns about higher gasoline prices helped dampen consumer confidence, economists said. The University of Michigan's index of consumer sentiment dipped to 88.2 in September from 89.3 in August, a preliminary reading showed.