US Consumer Looks Beyond Turmoil, Retails Sales Increases

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.

“When it comes to domestic data, including consumption, the U.S. is doing quite well,” Dana Saporta, a U.S. economist at Credit Suisse Securities USA in New York, said before the report. “Supporting consumption is strong job growth, lower energy prices. Even the stronger dollar helps reduce the price of goods that consumers buy from abroad.”

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.

Ten of 13 major categories showed increases last month, including auto dealers, restaurants and clothing stores.


Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell