INSTANT VIEW 3-Aug retail sales rose less than expected

NEW YORK (Reuters) - Sales at retailers rose a smaller-than-expected 0.3 percent in August and they recorded the biggest decline in almost a year when car sales were stripped out, a government report showed on Friday.

Excluding motor vehicles and parts, retail sales fell 0.4 percent last month, the sharpest drop since September 2006, the Commerce Department said.

OTHER DETAILS: -- August import prices fell 0.3 percent -- US second quarter current account narrows to $190.8 billion

COMMENTS:

IAN SHEPHERDSON, CHIEF U.S. ECONOMIST, HIGH FREQUENCY

ECONOMICS, VALHALLA, NEW YORK:

"Our measure of core sales, which excludes autos, gas, food and building materials, was unchanged. This is not a disaster, as July sales were up 0.9 percent, but it was unexpected."

DOUGLAS PETA, MARKET STRATEGIST, J&W SELIGMAN, NEW YORK:

"They came in short of consensus. This is not an unexpected consequence of weakening payrolls figures -- as that is the other shoe to drop from the payrolls data.

We don't know if payrolls data is going to continue to be weak in September and beyond, but if it were to be, then that it really raises the question will the consumer keep spending.

No doubt the headlines are disappointing, and there seems to have been a trend throughout the summer with stock investors that any sign of trouble on Friday -- just get out! It seems Friday is a shoot first ask questions on Monday sort of day.

But I do see that July was revised up, so maybe that is kind of a wash if you combine the two."

AL GOLDMAN, CHIEF MARKET STRATEGIST, A.G. EDWARDS, ST. LOUIS:

"The (stock) market initially is not going to like the retail figures, which came in much less than expected... And this growing evidence that the economy is slowing down rather dramatically and is going to conjure up increased fears of the 'R' word, being recession, rather than economic recovery. That's the bad news. The good news is this is more fuel for the Fed to cut rates perhaps 50 basis points next Tuesday and of course what the market's been focusing on this past week when the Dow was up 450 points from its intraday lows is hope that the Fed like the cavalry come charging over the hill and do something to goose up the economy, and I think that's although that's partially baked into the market investors would still be relieved if in fact it does lower interest rates 25 to 50 basis points.

KEVIN FLANAGAN, FIXED INCOME STRATEGIST FOR GLOBAL WEALTH

MANAGEMENT, MORGAN STANLEY, PURCHASE, NEW YORK: