Unexpectedly, August saw a 0.3 per cent increase in U.S. retail sales as consumers relaxed some of their recent restraints on other areas of spending due to a reduction in petrol prices.
Spending on automobiles and parts increased significantly by 2.8 per cent, while general merchandise stores, lodging establishments, and sporting goods stores all saw considerable increases.
Despite this, core retail sales—which do not include purchases of automobiles—fell 0.3 per cent in the month, indicating that the greatest inflation is negatively impacting the demand in 40 years. The Census Bureau’s downward revision of its estimate for July’s retail sales to indicate a decline of 0.4 per cent was further evidence of that weakness.
Retail sales increased overall by 9.1per cent from August of last year, which translates to a rise of less than 1 per cent after accounting for inflation.