Shoppers become choosy again

August 6, 2010 at 12:00a.m.

Associated Press

With the economy only limping along, Americans once again are being choosy at stores, many of them buying only at deep discounts because they can’t shake uncertainty about their jobs.

Retailers around the country posted a sales increase of just 2.8 percent for July over a year earlier — and at that time, the economy looked much bleaker than it does today.

The July figure, released Thursday by the International Council of Shopping Centers based on results from 31 chains, was the fourth-straight month of weak retail numbers. For the most part, economists were disappointed.

Without more jobs, Americans are likely to remain cautious with their spending, restraining the economic rebound, they said. But without more spending, companies likely will be slow to hire.

“To break out of this, we need both employment and consumption to come up together,” said Nigel Gault, an economist at IHS Global Insight.

Today the government will release its snapshot of the nation’s job market for July, and no one expects anything strong. Private companies are expected to have added 90,000 jobs for the month, not nearly enough for healthy economic growth.

The overall figure is expected to show a loss of 65,000 jobs for July, because of the end of temporary positions with the U.S. Census Bureau. Unemployment is not expected to budge much from its current 9.5 percent and actually may rise.

“With limited hiring by the private sector, it is becoming increasingly difficult for the recovery to be sustained,” said Andrew Gledhill, an economist at Moody’s Economy.com.

The stock market finished just about flat a day ahead of the jobs report.

In a reminder of how weak the job market is, the government said Thursday that first-time claims for unemployment benefits rose last week to their highest level in four months.

Claims rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.

Economists closely watch initial jobless claims because they are considered a gauge of the pace of layoffs and an indication of employers’ willingness to hire. And even at a time when profits are coming back, businesses aren’t very willing.

Pierre Ellis, an economist at Decision Economics, wrote in a note to clients that an “unyielding flow of layoffs” suggests employers still are not comfortable with the size of their staffs.

And with the job market still looking shaky, Americans are in no mood to spend freely.

The recession taught shoppers to buy items closer to when they actually needed to use them — a phenomenon known in the clothing industry as “buy now, wear now.” That is particularly true of poorer and middle-income shoppers.