retail salesRetail sales in July remained unchanged from June with more being spent on clothing and groceries, and less at auto dealerships and department stores. Consumer spending accounts for more than two-thirds of output in the U.S. economy. The labor market upswing has not delivered strong wages or spending growth as would be expected.

July saw a 2 percent increase in average wage over 2013 which, according to the Labor Department, is aligned with inflation. There is, however, a 0.5 percent margin of error and that number may be revised. Wages will need to increase, according to chief economist Joshua Shapiro of MFR Inc., in order for spending to increase.

Janet Yellen, Chairwoman of Federal Reserve, said lack of growth in wages raises concern about consumer spending.

Frank Comer of Wynnton Hardware said business has been extremely slow. He noted the apprehension of customers with regard to making purchases and repairs.

According to the Commerce Department, there was 4 percent growth in the U.S. economy in Q2, up from a 2.1 percent contraction in Q1. There was an increase in consumer spending, especially with postponed purchases following a harsh winter. Retail spending went up 1.5 percent in March from February, but dropped 0.6 percent in April, 04. percent in May, and 0.2 percent in June.

July sales went up 3.7 percent compared to 2013, but those numbers were down from June’s 4.3 percent annual gain. Without inflation consideration, overall spending rose 0.2 percent at grocery stores and restaurants, 0.1 percent at gas stations and 0.4 percent at clothing stores.

Christine Tattersall of Tattersall’s Clothing & Accessories said sales are up from 2013, and hotels are performing better this summer.

Other areas, including motor vehicle and parts sales, and department stores, saw 0.2 pecent and 0.7 percent declines in spending respectively in July. From 2013 to 2014, auto sales increased by 6 percent and department store sales decreased by 3 percent.

Karen Hoguet, CFO of Macy’s, said the economy is improving “very gradually” and that's affecting sales. Macy’s adjusted its forecast by 1-2 percent.