United States: Retail sales growth eases in August
Nominal retail sales increased 0.6% in month-on-month seasonally-adjusted terms in August, moderating from July’s 0.9% growth and missing market expectations of a 1.0% increase. Retail sales excluding cars, gasoline, building materials and food services—also known as core retail sales—rose 0.7% in August, cooling from July’s 1.3% increase.
August’s slowdown in retail sales growth largely reflected the expiration of the USD 600 weekly unemployment subsidy in July. Retail sales of clothing and accessories, and furniture grew solidly in August over the previous month, though purchases of electronics and appliances softened markedly. Meanwhile, spending on motor vehicles and on building and equipment services rebounded in August.
In annual terms, retail sales increased 2.6% in August, above July’s 2.4% rise. Meanwhile, the annual average variation in retail sales growth inched down to 0.1% from July’s 0.2%.
Commenting on August’s reading and the outlook ahead, James Knightley, chief international economist at ING, noted:
“The consumer has performed well so far given the health and economic impact from Covid, but there is still a long way to go in the recovery story. Given Covid is still not beaten we remain cautious on the growth outlook. Moreover, there is still huge unemployment, there is little prospect of meaningful fiscal stimulus in the next few months and there is the clear threat that a fractious election could hurt sentiment and spending.”