U.S. retail sales see surprise rebound in August

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Retail sales rose 0.3% last month from July to $683.3 billion, the Commerce Department said.

Geoff Robins

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U.S. consumers buying cars and heading to restaurants and bars in August led to a surprise rebound in retail sales, even as gasoline spending fell as prices at the pump fell, the data shows. of the government on Thursday.

Americans full of savings have been a key driver of the pandemic recovery in the United States and the Federal Reserve is watching economic data carefully as it fights to quell searing inflation without tipping the world’s largest economy into recession.

Retail sales rose 0.3% last month from July to $683.3 billion, the Commerce Department said.

But while the overall gain was much better than the flat result economists had expected, the July figure was revised down to show a 0.4% drop, so August’s increase means that the total remains below the June level.

The 3.0% jump in auto sales was the main factor behind the increase, and if that segment is excluded, retail sales would have fallen 0.3%, according to the report.

Gas stations saw sales fall 4.2% after weeks of lower energy costs.

US gas prices at the pump soared following Russia’s invasion of Ukraine in late February, but recent weeks have trended lower and have fallen more than $1 a gallon after hitting a low. historic high of more than $5 in mid-June, compression of family budgets.

Meanwhile, restaurants and bars rose 1.1%, as did building materials, the report said, but online sales fell.

“Households continue to spend, supported by strong employment growth and rising nominal incomes. However, households are facing headwinds from high inflation which is not yet showing significant signs of abating,” he said. said Rubeela Farooqi of High Frequency Economics.

The data is seasonally adjusted but does not take price variations into account. So as costs rise, a shopping dollar doesn’t stretch as far, and American families have had to use more of their income to buy basics.

The latest consumer price data showing widespread inflation bolstered expectations that the Federal Reserve will announce a third consecutive three-quarter point interest rate hike at its policy meeting next week.

The central bank has raised the benchmark borrowing rate four times this year, including two massive three-quarter point increases in June and July after annual US inflation hit 9.1% in June .

As the annual pace slowed to 8.3% in August, Fed officials made clear they would continue to raise borrowing costs until inflation subsides.

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