U.S. retail sales fell 2.1% in August; Retail sales remain a bright spot

U.S. retail sales fell 2.1% in August, the biggest decline in nearly four years, as auto sales plunged a record 12%, the Commerce Department estimated Wednesday.

Excluding autos, retail sales increased 1%, with half of the increase due to higher sales of gasoline, reflecting higher prices, MarketWatch reports.

Excluding both autos and gas, retail sales increased 0.5%, with gains across most store types.

In July, retail sales increased 1.8%, with sales excluding autos up 0.5%.

The August retail-sales report shows U.S. consumers were maintaining robust spending levels despite the large increase in gasoline prices, MarketWatch reports.

“These results cast more cold water on the notion that if nondiscretionary spending on energy swells, it must crimp discretionary spending. It hasn’t,” Ken Mayland, chief economist for ClearView Economics, reportedly said. “Consumer spending has continued to advance strongly” even as gas prices have doubled over the past two years.

Since the storm, however, retail-chain stores have reported a softening of demand, which they attribute to the loss of discretionary income from higher gas prices and some consumer caution.

Softness in department stores, restaurants and clothing “suggest higher gasoline prices eroded some categories of discretionary spending in the month,” Joshua Shapiro, chief economist for MFR, reportedly said.

By store type, sales were mixed in August.

Sales at general-merchandise stores rose 0.3%, while clothing store sales were flat. Sales at stores offering health and personal care goods jumped 1.2%.

Sales at food stores rose 0.6%, but restaurant sales were flat.

Sales at leisure-time goods stores rose 0.5%.

Nonstore retailer’s sales rose 1.8%.

Furniture-store sales increased 0.9%, while building-material store sales increased 0.5%. Electronics-store sales rose 0.3%.

Gasoline station sales increased 4.4%.

Retail sales are up 7.9% in the past 12 months, MarketWatch reports. Excluding autos, sales are up 9.4%. Excluding gasoline, sales are up 6%. The figures do not include price changes.

Automakers had boosted sales in June and July by offering sweetheart deals, but those gains were reversed in August, MarketWatch reports.

The government could not estimate the impact of Hurricane Katrina on August sales, MarketWatch reports. The storm hit southern Florida before slamming into the Gulf Coast on Aug. 29. The impacted metro areas along the Gulf Coast account for 1.2% of U.S. sales.

The Commerce Department reportedly estimated August sales for those companies that were unable to report monthly figures. Such estimations for missing data are routine and are a major reason why the initial retail sales figures often are revised.

In a separate report, the Federal Reserve said industrial production increased 0.1% in August, with Katrina subtracting 0.3 percentage points from growth.

Follow JCK on Instagram: @jckmagazine
Follow JCK on Twitter: @jckmagazine
Follow JCK on Facebook: @jckmagazine
JCK logo
JCK

Log Out

Are you sure you want to log out?

CancelLog out