Summary Box: Retail sales drop unexpectedly as consumers keep wallets closed

Summary Box: Unexpected drop in retail sales

WHAT HAPPENED?: Retail sales fell unexpectedly in July, while first-time claims for jobless benefits rose slightly last week. The reports raised concerns about the ability of consumers to fuel a broad economic recovery.

WHAT’S IT MEAN?: Many analysts think programs like Cash for Clunkers and the Obama administration’s stimulus package are boosting the economy. But they think strong consumer spending is needed to help spur a recovery once those programs end. Thursday’s retail report indicates consumers remain cautious.

WHAT’S NEXT FOR THE ECONOMY?: Many economists still expect the nation’s gross domestic product, the broadest gauge of the economy, to grow 2 to 3 percent in the current July-September quarter and by a similar amount in the fourth quarter. But some worry it will be hard to sustain that pace next year if consumers remain reluctant to spend.