Retail sales growth sluggish in August as consumers fight to keep up with inflation

The Census Bureau reports that retail sales were higher than anticipated in August due to price increases in a variety of sectors and a significant drop in gasoline station receipts.

Advance retail sales for the monthThe Dow Jones forecast for no change was better at 0.3%, which is an increase of 0.3% over July. It is not adjusted to inflation as August saw 0.1% growth. This indicates that prices have outpaced spending.

Inflation as gauged by the consumer price indexRetail sales increased 9.3% and 8.3% respectively over the previous year to August.

Excluding autos, however, the monthly sales fell 0.3%, which is lower than the estimated 0.1% rise. Sales rose 0.3% excluding autos and gasoline

The sales of motor vehicle and parts dealers rose 2.8%. It helped offset the 4.2% decrease in receipts at gas stations. Gas station receipts fell steeply as they saw their prices fall. The online sales declined 0.7% and bar sales increased 1.1%.

Further consumer difficulties were revealed by revisions to July’s numbers. The initial report was unchanged, but it showed an increase of 0.4%.

The “control” group, which economists use in order to break down retail sales, has remained the same as July. It excludes auto dealers and building material retailers as well as sales at gas stations, oil stations, office supply shops, mobile homes, tobacco stores and other retail outlets. This is how the government calculates retail’s proportion of GDP.

Peter Boockvar is chief investment officer of Bleakley Advisory Group. He stated that while the top-line sales figures were driven by higher inflation, volumes are clearly falling. However, real sales numbers are still negative. According to Peter Boockvar, chief investment officer at Bleakley Advisory Group, “Core retail sales will be well below expectations and this will lead to a reduction in the GDP estimates for Quarter 3.

Pantheon Macroeconomics’ chief economist Ian Shepherdson called the report “a mixed news release, but there is no reason to be alarmed.” The slump in the housing market will impact some of these sales, but overall spending should increase as real incomes rise.

Retail numbers were the most important indicator of economic activity today.

Elsewhere, initial jobless claimsFor the week ending September 10, 213,000 was recorded. That’s a decrease by 5,000 from previous weeks and more than the estimated 225,000. The August decline in import prices was 1% less than expected, which is below the 1.2% drop.

Two manufacturing gauges had mixed results. The New York Federal Reserve Empire State Manufacturing IndexThe September reading was -1.5. This is a 30 point jump over the month before. The however, Philadelphia Fed’s gaugeThe reading came in at 9.9, which is a significant drop in comparison to the August 6.2 and lower than the expected positive 2.3.

These Fed readings show the proportion of firms reporting growth versus contraction. This suggests that manufacturing experienced a broad pullback in the month.

Reports indicated that price pressures have been easing. New York’s prices paid indexes and received indexes declined respectively 15.9 points and 9.1 point, but both were still in the growth zone with readings 39.6 to 23.6. The prices paid dropped by almost 14 points in Philadelphia while the prices received rose 6.3 points. The indexes of 29.8 & 29.6 were respectively 29.8 / 29.6, meaning that prices are rising but slower overall.

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