Reflecting a jump in auto sales, the Commerce Department released a report on Friday showing U.S. retail sales increased by more than expected in the month of August.
The Commerce Department said retail sales rose by 0.4 percent in August after climbing by an upwardly revised 0.8 percent in July.
Economists had expected retail sales to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.
The stronger than expected retail sales growth came as sales by motor vehicle and parts dealers spiked by 1.8 percent in August after inching up by 0.1 percent in July.
However, Andrew Hunter, Senior U.S. Economist at Capital Economics, called the jump in auto sales “suspicious looking,” noting the surge in the nominal value of motor vehicle sales is “hard to square” with the 0.7 percent increase in the unit sales reported by manufacturers.
Excluding the jump in auto sales, retail sales came in unchanged in August after surging up by 1.0 percent in July. Ex-auto sales had been expected to inch up by 0.1 percent.
Increases in sales by non-store retailers, building material and supplies dealers, and sporting goods, music and book stores were offset by drops in sales by gas stations, department stores and food service and drinking places.
Notably, the report said sales by non-store retailers surged up by 1.6 percent in August compared to a significantly downwardly revised 1.7 percent jump in July.
The initial estimate said sales by non-store retailers spiked by 2.8 percent in July, reflecting the impact of online retail giant Amazon’s (AMZN) Prime Day promotion.
Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, rose by 0.3 percent in August after climbing by 0.9 percent in July.
“As a result, the three-month-on-three-month growth rate dropped back to 8.1%, from a peak of 10.2% in May, but that is still an unusually strong pace,” said Hunter.
He added, “Overall, underlying retail sales growth is slowing but, given that the earlier red-hot growth was clearly unsustainable, that doesn’t come as a complete surprise.”
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
