US consumer confidence ebbed early this month and retail sales rose just slightly in August despite strong demand for automobiles and other big-ticket items, the latest indications economic growth slowed in the third quarter.

The lack of momentum in the economy was underscored by other data on Friday, showing an energy-led increase in wholesale prices last month, but subdued underlying inflation pressures.

The signs of soft domestic demand are unlikely to deter the Federal Reserve from initiating cuts to its bond-buying programme as early as next week, however.

“Demand is probably good enough to spur the Fed to taper asset purchases by a wee amount next week,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.

The Thomson Reuters/University of Michigan’s preliminary reading on the overall index of consumer sentiment fell to 76.8 in September, the lowest since April. Confidence fell amid concerns over high interest rates. Retail sales increased 0.2 per cent last month as Americans bought automobiles, furniture and electronics and appliances, the Commerce Department said in a separate report.

But auto sales strength appears to be drawing spending power away from other areas as purchases of clothing, building materials and sporting goods fell.

Retail sales, which account for about 30 per cent of consumer spending, were still up for a fifth consecutive month.

They had gained 0.4 per cent in July and economists polled by Reuters had expected them to rise 0.4 per cent last month.

Stripping out automobiles, gasoline and building materials, so-called core sales were up 0.2 per cent after rising 0.5 per cent in July. Core sales correspond most closely with the consumer spending component of gross domestic product.

Though core sales slowed a bit from July, they matched the second quarter’s 0.2 per cent average monthly gain.

The dollar fell against the euro and the yen after the retail sales report. Prices for US Treasury debt rose.

In a separate report, the Labour Department said its seasonally adjusted producer price index increased 0.3 per cent last month after being flat in July.

Economists had expected prices received by the nation’s farms, factories and refineries to rise 0.2 per cent in August.

In the 12 months through August, wholesale prices rose 1.4 percent after advancing 2.1 per cent in July. August’s increase was the smallest since April.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.