US retail sales rise in August but demand slowing
US retail sales unexpectedly rose in August but demand is slowing, according to figures released on Thursday by the Labor Department.
Retail sales rose 0.3% following a downwardly-revised 0.4% decline in July, and versus consensus expectations of a 0.1% dip. Previously, the figures for July had shown an unchanged reading.
Excluding gasoline, retail sales rose 0.8% in August.
The figures showed that consumers spent money on back-to-school items, auto vehicles and parts, and eating out.
Sales at gas stations fell 4.2%, while sales at auto dealerships rose 2.8%. Excluding gasoline and motor vehicles, retail sales gained 0.3%.
ING economist James Knightley said that while the month-on-month retail sales figure was better than expected, there have been quite a few revisions to the history that hint of a softer trend in spending.
"Moreover, the control group, that excludes volatile items such as autos, building supplies and food service, which better matches broader consumer trends as measured within GDP, was considerably softer than predicted," he said. "Spending was flat on the month rather than rising 0.5%, while July’s figure was revised down to growth of 0.4% having initially been reported as +0.8%."
He added: "Consumer spending is more than retail and there is scope for rebalancing towards services, but the report still favours a 75 basis points hike from the Fed next week over 100bp."