Retail sales rise amid robust demand | Companies
US retail sales rose unexpectedlyin August, when an increase in purchases in most categories more than offset weakness in car dealerships and showed robust consumer demand for goods.
The value of total retail purchases rose 0.7% last month after a downwardly revised 1.8% decline in July, Commerce Department figures showed Thursday. Excluding automobiles, sales rose 1.8% in August, the largest increase in five months.
The median estimate in a A Bloomberg poll of economists called for a 0.7% decline in total retail sales, with projections ranging from a 3.3% decline to a 1.1% increase.
US stock index futures eased losses and bonds slid after the report.
The surprising increase in sales, partly underpinned by back-to-school purchases and payments to millions of families with children, suggests healthy demand for goods. The report showed firmer receipts at online retailers, general stores, furniture stores, and grocery stores Shops. The Delta variant brakes Demand for services, such as travel and leisure, that may allow Americans to shift their spending back onto goods. the Retail sales data showed that restaurant and bar revenues, the only category of service spending in the report, stagnated in August. Meanwhile, grocery store revenues increased 2.1%.
“While spending on goods has been much higher than we expected, this will likely only add to the bottlenecks seen in recent months, while the flattening of spending in restaurants and bars suggests that the general recovery in service consumption is likely to have stalled.” said Michael Pearce, a senior US economist at Capital Economics, said in a note.
A surge in COVID-19 infections, soaring prices, and ongoing supply chain challenges have led to a wave of downgrades to economic growth forecasts for the third quarter in recent weeks.
Earlier this month, economists at Goldman Sachs Group Inc. lowered their third-quarter consumption forecast to an annualized decline of 0.5% due to the impact of the delta on services Expenditure.
Breakdown by category
According to the Department of Commerce report, 10 out of 13 categories saw sales increases. Sales declined at car dealerships, electronics and household appliances, as well as sports and hobby shops.
Auto and parts dealer sales fell 3.6% in August, after falling 4.6% a month earlier. This reflects soaring prices and limited inventory levels, which Wards Automotive Group says has pushed auto sales to their worst levels in more than a year.
Americans have also faced higher prices for a variety of goods and services in recent months as companies – at least in part – pass on additional costs related to material and labor restrictions.