U.S. retail sales grew faster than expected in August, offering signs of resilient consumer spending despite concerns over a cooling labor market and persistent inflationary pressures.
According to data released by the Commerce Department on Tuesday, retail sales rose 0.6% month-on-month, surpassing economists’ forecasts of a 0.2% increase. July’s figures were also revised upward to show a similar 0.6% gain.
On an annual basis, retail sales expanded by 5%, though it is worth noting that the data is not adjusted for inflation, reflecting nominal values rather than real purchasing power.
Sector Highlights
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Online sales jumped 2% in August, following a 0.6% increase in July.
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Auto sales climbed 0.5%, compared with a stronger 1.7% rise in the previous month.
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Brick-and-mortar stores reported a 1% gain.
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Sales of sporting goods, musical instruments, and books advanced 0.8%, after rising 1.6% in July.
Economic Concerns
Despite the upbeat sales figures, analysts warn that household spending may face headwinds if labor market conditions continue to weaken. Recent data has pointed to slower job growth and a modest uptick in unemployment.
Consumer sentiment also slipped. The University of Michigan’s September survey fell to its lowest level since May, as households expressed concerns over rising prices and tariffs, which threaten to erode their purchasing power.
