WASHINGTON, Sept 12 - U.S. retail sales rose far less than expected in August as shoppers held onto their wallets despite tax rebates and improving consumer sentiment, a disappointing government report on Friday showed. Total retail purchases rose 0.6 percent last month to $319.2 billion, the Commerce Department said, after a downwardly revised increase of 1.3 percent in July. The number was far lower than Wall Street expectations for a 1.4 percent advance. Analysts had expected that better consumer sentiment, tax rebates and back-to-school shopping would translate into good business for the retail sector.
Excluding sales of motor vehicles and parts, demand for retail goods rose 0.7 percent, broadly in line with expectations for a 0.8 percent rise. Auto dealerships saw sales rise 0.5 percent despite bountiful incentives, after soaring 2.4 percent in July. Sales at gasoline stations rose 2.7 percent, the highest since February this year. Pulling down the overall sales number was a 1.4 percent drop in clothing and accessories sales and a 0.2 percent fall in building materials and garden supplies. Business at electronics and appliance stores rose 1.4 percent and sales at general merchandise stores were up 1.1 percent.//