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United States: Retail sales growth beats market expectations in August
Latest reading: Nominal retail sales rose 0.6% in seasonally adjusted month-on-month terms in August, stable from the previous month’s reading but triple market expectations.
Relative to the prior month’s figures, the reading for non-store retailers improved in August (+2.0% month on month vs +0.6% in July). In contrast, readings softened for motor vehicle and parts dealers (+0.5% vs +1.7% in July), food and beverages (+0.3% vs +0.5% in July), general merchandise stores (-0.1% vs 0.0% in July) and gasoline stations (+0.5% vs +0.9% in July).
In annual terms, retail sales rose 5.0% in August, following a 4.1% rise in the previous month.
Panelist insight: On the outlook for retail sales, TD Economics’ Ksenia Bushmeneva said:
“Consumers may have breathed a sigh of relief that their worst inflation fears have not materialized, however, the impact of tariffs continues to show up in core goods prices. Up until recently, businesses have tried to absorb higher costs and shield consumers, but inflation data over the last few months have shown that some of the costs are now being passed on. We expect greater pass through of tariff-related price increases over the coming months. With the labor market downshifting and cost pressures heating up, consumer spending momentum is likely to remain modest through year-end.”
