U.S. August Retail Sales - Positive picture restored
August retail sales have surprised to the upside, restoring a positive picture after a weak July. Overall sales rose by 1.2%, as did sales ex autos and gasoline. Ex auto sales and the control group which contributes to GDP both increased by 1.4%, these gains more significantly above expectations than the overall increase.
Revisions were marginally positive, June now up by 0.3% rather than 0.2% and July down by 0.5% rather than 0.6%.
July sales were restrained in particular by a 1.7% decline from nonstore retailers which was seen due to Amazon operating a promotion in June rather than July. Nonstore retailers led by August increase with a rise of 2.6% which is surprisingly strong, not only more than fully reversing the July decline but even moving above June’s level when the promotion did take place.
The strength of the data was broad based with only building materials and garden equipment negative, and only by a marginal 0.2%. Department stores did fall by 0.8% but the broader general merchandise component of which it is part rose by 0.7%, Gains exceeding 1.0% were seen from electronics and appliances, sporting goods, miscellaneous goods and eating and drinking places.
The 0.6% rise in autos was a little less than industry sales data had implied but a 3.1% increase in gasoline sales suggests a rise in volumes as well as prices.
3m/3m gains of 1.2% overall and 1.0% ex autos are the slowest since February, while that ex autos and gasoline at 1.4% is the slowest since March. However the gains, which are not annualized, are still healthy. The consumer may be losing some momentum, but remains impressively resilient to weakness in real disposable income.
