Retail sales up just 0.1 percent after previous strong gain
U.S. retail sales barely rose in August as consumers slowed their spending after a robust month of shopping in July.
The Commerce Department said Friday that the value of purchases ticked up just 0.1 percent last month, the smallest increase in six months. But the sluggish figure may prove only a temporary blip. It partly reflected falling prices for items such as clothing, and it followed a strong gain of
0.7 percent in July.
Consumer confidence soared to its highest level in 18 years in August as Americans expressed a more optimistic outlook on the economy. That suggests that retail sales could rebound in the coming months.
“The trend in retail spending is still solid, fueled by job growth and rising wages,” said Ben Ayers, senior economist at Nationwide. “We expect retail sales to pick up again in coming months to continue a strong 2018 for consumer activity.”
Still, auto sales fell 0.8 percent last month, and clothing stores sales plunged 1.7 percent, the steepest drop in 18 months, though that figure mostly reflected lower-priced clothing rather than declining demand.
Retail sales are monitored closely by economists because they provide an early read on consumer spending, which drives about two-thirds of economic activity.
Sales at gas stations jumped 1.7 percent, an increase that reflected higher prices at the pump. Excluding gas stations, retail sales slipped 0.1 percent, the first decline since January.
Sales increased at electronics and appliance stores, sporting goods stores, restaurants and bars, and a category that includes online and catalog retailers. Online and catalog sales have jumped 10.4 percent compared with a year earlier, a much larger increase than the 6.6 percent rise in overall sales.
“We expect retail sales to pick up again in coming months to continue a strong 2018 for consumer activity.” – BEN AYERS, SENIOR ECONOMIST AT NATIONWIDE