Wal-Mart Stores Inc's slower-than-expected monthly sales forecast suggests the economy may not help US President George W. Bush lure undecided voters in November.

"Wal-Mart is reporting comparable-store sales gains below historical trends," said Richard Hastings, a retail analyst at Bernard Sands LLC in New York. "The economy could tend to help" Democratic challenger John Kerry, Hastings said.

September sales are rising 2 to 4 per cent, Wal-Mart, the world's biggest company by sales and employees, said on Monday. The Bentonville, Arkansas-based company as recently as September 2 forecast a gain of as much as 4 per cent from September 2003. August sales increased 0.5 per cent, the smallest monthly gain in four years. Monthly sales growth averaged about 6 per cent during the past decade.

The company's sales, which represent about 9 per cent of US retail spending, represent one of the most-timely gauges of current consumer spending, said Britt Beemer, chairman of Americas Research Group in Charleston, South Carolina.

"They are a reflection of middle-income America," said Beemer, whose firm surveys more than 1,000 people weekly about their shopping habits. "Everyone talks about gas prices being the big bugbear, but it is not just gas prices. Consumers are being more frugal."

US shoppers have checked their spending since June as crude oil prices rose to a record US$49.40 a barrel last month. The US economy has lost about 900,000 jobs in net terms since Bush took office in January 2001. Consumer confidence, as measured in a monthly survey by the University of Michigan, fell for the first time in August since May.

"We have hit a soft patch," said Michael Vogelzang, chief investment officer with Boston Advisors Inc, which owns Wal-Mart shares among US$2.6 billion in assets. "Oil prices have started to hit the consumer a little bit. That hurts people who are dependent on the consumer at the margin, things like Wal-Mart."

Bush said on September 3 that the creation of 144,000 jobs in August is evidence his US$1 trillion tax cuts are working. A poll conducted between August 31-September 2 by Time magazine showed 47 per cent trusted the incumbent more on economic management than Kerry, who scored 42 per cent.

Bush leads Kerry by 52 per cent to 45 per cent in a CNN/USA Today/Gallup poll of likely voters on September 3 to September 5. Bush has 49 per cent support compared with Kerry's 48 per cent among registered voters, the poll said.

The retailer, which also operates Sam's Clubs, gets four-fifths of its sales from the US.

Its US$256 billion in sales last year were more than the next five US retailers in size, combined.

"It's very clear that President Bush's economic policies are wrong for the American middle class," Kerry said in a statement. Shares of Wal-Mart rose 4 cents to US$53.29 in New York Stock Exchange composite trading yesterday.

US employers added 144,000 workers to payrolls in August, the most since May and the first acceleration in five months. The economy must add about 150,000 jobs a month to absorb a growing workforce and hold the unemployment rate steady, said economists including Ethan Harris at Lehman Brothers Inc in New York.

Bush said the economy has added jobs for 12 straight months. "Our economy is strong and getting stronger," Bush said in a speech on September 3.

"We are in a slight retrenchment for consumer spending," said Anthony Chan, senior managing director and chief economist at JP Morgan Fleming Asset Management in Columbus, Ohio. "Many of the negative headwinds we are facing are impacting the clientele that are served by Wal-Mart."

The average wage for about 80 per cent of non-farm workers, adjusted for inflation, fell in the past three months, according to the US Bureau of Labour Statistics.

The average Wal-Mart customer has household income of about US$40,000, according to Deborah Weinswig, an analyst at Citigroup Inc's Smith Barney unit. The average median income in the US in the last three years was US$43,527, according to the US Census Bureau.

"The effect of higher gas prices, a challenging job market, very weak wage growth and consumer-price inflation for middle-and lower-income households has clearly hurt Wal-Mart sales growth," said Bernand Sands's Hastings.

While gas cost 16 per cent more in August than a year earlier, prices are down from records in late May as higher gasoline imports and domestic refinery production boosted US fuel reserves to normal.

The average US retail price for regular-grade gasoline fell to a four-month low of US$1.866 a gallon, the Energy Department reported last week.

"Gas is a larger share for budgets at the lower end of the income scale." said Scott Brown, senior economist at Raymond James & Associates Inc in St. Petersburg, Florida.