Dow Jones Down Nearly -12% Since July 22

Tomahawk, WI 8/12/2011 (PennyPayDay) – Consumers likely spent more money on autos and at department stores in July. A jump in retail sales could signal Americans are a little more confident in the economy and help calm shaky financial markets at a precarious time.

Economists expect retail sales rose 0.4 percent in July, according to a survey by FactSet. The forecast is partly based on an expectation that car dealerships were busier and back-to-school sales attracted more shoppers. But economists also factored in that consumers paid slightly higher prices for gas.

The Commerce Department will release the new report at 8:30 a.m. Eastern on Friday.

The report is the government's first read on consumer spending for the July-September quarter. Consumer spending is always closely watched because it accounts for 70 percent of economic growth. But the mood of the consumer is of particular interest to traders right now.

A batch of poor data and a gloomy outlook from the Federal Reserve this week have made many more nervous that the economy could fall back into a recession. The Dow has lost nearly 1,600 points, or more than 12 percent, since July 22.

High unemployment and a spike in gas prices have forced many consumers to be more cautious about spending. Their hesitation was a major reason the economy grew a meager 0.8 percent in the first six months of the year, the weakest growth since the recession officially ended.

Retail sales, which don't include spending on services, have been slowing since February. They grew only 0.1 percent in June, and when excluding car sales, retail spending was flat.

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