Control-group categories that feed GDP rose about 1.4%
U.S. retail sales rose 1.2% in August to $773.9 billion, the Commerce Department said Wednesday, rebounding from a 0.5% decline recorded in July. The August reading exceeded the 0.8% growth that economists polled by The Wall Street Journal had forecast.
Retail sales are recorded in nominal terms and account for the total number of dollars spent. Americans were still paying high prices for gasoline in August, but outside of gasoline stations, the data showed consumer strength.
Sales in the so-called ‘control-group’ categories that feed into the formula for gross domestic product rose about 1.4%, the Commerce Department said. Sales at nonstore retailers rose 2.6% over the month, while spending in other discretionary categories such as electronics and appliance stores rose 1.6%.
Some analysts had forecast that August retail sales would rebound after July’s lower-than-expected reading, attributing the July weakness to Prime Day and related promotions shifting from July into June this year.
Separate data from Bank of America pointed in the same direction. Total credit and debit card spending per household rose 0.9% month over month in August on a seasonally adjusted basis, following a 0.2% decline in July.
A positive August retail sales reading, paired with a better-than-expected August jobs report, should reassure economists that growth was more solid than July’s figures suggested, The Wall Street Journal reported.
Bradley Saunders, North America economist at Capital Economics, wrote that the data ‘reaffirms that the economy is more than capable of handling higher interest rates, providing the Fed plenty of scope to hike to get inflation under control.‘