An uptick in gas prices boosted retail sales in August, which climbed 0.6 percent from July according to government data
Washington (AFP) - Retail sales in the United States accelerated slightly in August, government data showed Thursday, as a spike in gas prices boosted sales at service stations.
Sales in the world’s top economy climbed 0.6 percent to $697.6 billion last month, inching up from July’s revised 0.5 percent bump, the Commerce Department said.
Economists had forecast a slowdown from July to August although consumers continued to spend – defying expectations that they would pull back more quickly as higher interest rates bite.
Analysts do not foresee the current strength persisting, however, as the labor market gradually loses steam and student loan repayments weigh on spending.
The figures come after a mixed report Wednesday showing an uptick in consumer inflation, and as the US central bank weighs the need for further rate hikes to ease demand.
Excluding gas stations, retail sales in August picked up just 0.2 percent from July, markedly lower than the headline figure, according to Thursday’s report.
Among other segments, sales at food and beverage stores cooled, as did spending at general merchandise stores.
But gas station sales increased 5.2 percent from July to August, significantly higher than the prior month’s 0.1 percent figure, said the Commerce Department.
- Growing challenges -
“Most people have few alternatives to driving,” noted economists at Pantheon Macroeconomics in a recent report.
They added that gas station sales were likely boosted thanks to a 10.6 percent spike in gas prices.
“Increased spending on gas in August likely was funded, at least in part, by cuts to households’ discretionary spending,” the Pantheon report said.
This could have bogged down sales in other areas.
Consumption growth remains “on track for a strong gain” in the third quarter this year, economist Michael Pearce of Oxford Economics said in a note.
“But with job and wage growth slowing, student loan repayments restarting, and borrowing conditions still tightening, the headwinds to consumer spending are mounting,” he added.