Retail Sales in USA

USA - Retail Sales

U.S. retail spending remains resilient in August

Nominal retail sales increased 0.4% over the prior month in seasonally-adjusted terms in August, down from the revised 0.8% rise registered in July (previously reported: +0.7% month-on-month) but exceeding market expectations of softer 0.2% growth. The strong turnout signals that household spending continues to be the heavy lifter in the economy and will likely mask growing weaknesses in other sectors in the third quarter GDP result. That said, the latest round of tariffs on Chinese goods that came into effect on 1 September, which target more consumer goods, could gradually dampen retail sales moving forward, particularly if businesses pass off costs to consumers.

Retail sales excluding automobiles, gasoline, building materials and food services—also known as core retail sales as they most closely reflect private consumption in the GDP readings—rose 0.3% on a month-on-month basis in August, down from July’s robust 1.0% gains.

Strong retail sales growth in August was due to a surge in motor vehicle and parts sales—usually a very volatile category—while non-store retail sales, which includes online shopping, posted another notable jump. Moreover, health and personal care sales recovered in the month. On the other hand, sales at brick-and-mortar stores; clothing and accessories retailers; and food services and drinking places declined in August.

In annual terms, retail sales growth accelerated to 4.1% in August from a revised 3.6% in July (previously reported: +3.4 year-on-year). Conversely, annual average retail sales growth softened to 3.4% from 3.5%.

FocusEconomics Consensus Forecast panelists expect private consumption to grow 2.4% in 2019, which is up 0.1 percentage points from last month’s forecast. For 2020, the panel sees private consumption increasing 2.1%.