U.S. retail sales climbed well above forecasts in August as consumers increased spending online, at restaurants and across most major store categories despite higher gasoline prices.
By yourNEWS Media Newsroom
American consumers increased their spending sharply in August, pushing retail sales up 1.2% from the previous month and exceeding economists’ expectations by more than double.
The Commerce Department reported Wednesday that sales at stores, restaurants and online retailers rose broadly during the month. Economists had projected an increase of 0.5%.
The strength was not limited to gasoline purchases. When gas stations were excluded, retail sales still increased 1.1%, indicating that higher fuel prices did not prevent consumers from spending more elsewhere.
Gas station sales increased 3.1% during August as motorists faced higher prices at the pump. Despite the additional money going toward fuel, spending remained positive across nearly every other major retail category.
Twelve categories tracked by the Bureau of Economic Analysis recorded higher sales. Building material and garden equipment and supply dealers were the sole category to decline, with sales falling 0.2%.
Consumer spending has also remained higher over a longer period. During the first eight months of the year, overall retail sales were 5.2% above the same period a year earlier.
Removing gasoline purchases from the comparison, sales during the January-through-August period were up 4.2% from a year earlier.
Restaurants and bars recorded a 1.2% increase in August. Spending at those establishments is closely watched because dining out is generally considered discretionary and can provide an indication of consumers’ willingness to spend beyond necessities.
Online retailers posted one of the largest increases of the month. Nonstore sales climbed 2.6%, reflecting continued strength in internet shopping.
Electronics and appliance retailers also reported substantial growth, with sales increasing 1.6%.
The category encompassing sporting goods, hobby, musical instrument and book stores rose 1.2%.
Health and personal care stores recorded a 0.9% increase, while furniture and home furnishings retailers also saw sales rise 0.9%.
General merchandise store sales advanced 0.7%. Clothing and clothing accessory stores posted the same 0.7% increase.
Food and beverage spending remained positive as well, with grocery store sales rising 0.5%.
Auto-related spending strengthened during the month. Sales at motor vehicle, truck and auto parts dealers increased 0.6%, representing a comparatively strong gain for a category that has experienced relatively modest growth during much of the year.
The August numbers were released after surveys and other measures had pointed to weakening consumer sentiment, while rising gasoline prices had raised questions about whether households would reduce discretionary purchases to absorb higher transportation costs.
Instead, consumers increased spending across most of the retail economy.
The government’s retail sales figures are adjusted to account for recurring seasonal patterns, including factors such as back-to-school shopping. They are not adjusted for changes in consumer prices.
That distinction is important because inflation can increase the dollar value of retail sales even when the quantity of goods purchased changes less dramatically.
The Labor Department reported last week that consumer prices increased 0.4% in August. The measure excluding gasoline, food and shelter increased 0.3%.
Even with that price growth, the 1.2% monthly increase in total retail sales was substantially larger than the overall rise in consumer prices reported for August.
The widespread nature of the gains also distinguished the month’s report. Higher gasoline spending accounted for part of the increase, but restaurants, online merchants, electronics retailers, clothing stores, furniture sellers, grocery stores and general merchandise retailers all reported additional sales.
With only building material and garden stores declining, the August figures showed consumers continuing to spend across both essential and discretionary categories as the third quarter progressed.
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