Retail sales in the U.S. increased by much more than expected in the month of August, according to a report released by the Commerce Department on Thursday.
The report said retail sales climbed by 0.6 percent in August after rising by a downwardly revised 0.5 percent in July.
Economists had expected retail sales to inch up by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.
Excluding a modest rebound in sales by motor vehicles and parts dealers, retail sales still rose by 0.6 percent in August following a downwardly revised 0.7 percent advance in July.
Ex-auto sales were expected to rise by 0.4 percent compared to the 1.0 percent jump originally reported for the previous month.
The bigger than expected increase in retail sales largely reflected a surge in sales by gas stations, which spiked by 5.2 percent in August amid a jump in gasoline prices.
Excluding sales by gas stations, retail sales rose by just 0.2 percent in August after climbing by 0.5 percent in July.
“The solid increase in headline retail sales in August was not as good as it appeared as it was driven by a price-related surge in gasoline station sales while underlying goods and services spending lost momentum, and July’s gain was revised lower,” said Michael Pearce, Lead U.S. Economist at Oxford Economics.
He added, “Consumption growth is still on track for a strong gain in Q3 overall, but with job and wage growth slowing, student loan repayments restarting, and borrowing conditions still tightening, the headwinds to consumer spending are mounting.”
Sales by clothing and accessories stores, electronics and appliance stores and health and personal care stores saw notable growth during the month.
Meanwhile, sales by miscellaneous store retailers and sporting goods, hobby, musical instrument and book stores moved sharply lower.
Core retail sales, which exclude automobiles, gasoline, building materials and food services, inched up by 0.1 percent in August after climbing by a downwardly revised 0.7 percent in July.
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