Retail Sales in U.S. Rise as Consumers Unshaken by Turmoil

Retail sales in the U.S. climbed for a second straight month, a sign consumers may be looking past recent volatility in financial markets.

The 0.2 percent increase in August followed a 0.7 percent gain in July that was larger than previously reported, Commerce Department figures showed Tuesday in Washington. The median forecast of 84 economists surveyed by Bloomberg called for a 0.3 percent advance.

Although confidence has taken a hit from stock-market turmoil and global-growth concerns, the data show households are still putting their savings from cheap energy to work. More jobs and higher pay would go a long way in supporting household spending, which Federal Reserve policy makers are watching as they consider raising interest rates as soon as this week.

“The trend is strong and robust,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA in New York, who correctly forecast the increase in retail sales. Tuesday’s data shows spending is “resistant to outside shocks, and that’s quite important at this point in time.”

Estimates in the Bloomberg survey ranged from a decrease of 0.1 percent to a 0.6 percent gain. July retail sales were previously reported as up 0.6 percent. June data was unrevised at little changed.

Another report showed that while consumers are holding up, factories are struggling. Manufacturing in the New York region contracted in September for a second straight month, reflecting declining orders and employment, according to figures from the Federal Reserve Bank of New York.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.