Retail sales in the U.S. increased by much more than expected in the month of August, according to a report released by the Commerce Department on Thursday.<\/p>\n
The report said retail sales climbed by 0.6 percent in August after rising by a downwardly revised 0.5 percent in July.<\/p>\n
Economists had expected retail sales to inch up by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.<\/p>\n
Excluding a modest rebound in sales by motor vehicles and parts dealers, retail sales still rose by 0.6 percent in August following a downwardly revised 0.7 percent advance in July. <\/p>\n
Ex-auto sales were expected to rise by 0.4 percent compared to the 1.0 percent jump originally reported for the previous month. <\/p>\n
The bigger than expected increase in retail sales largely reflected a surge in sales by gas stations, which spiked by 5.2 percent in August amid a jump in gasoline prices.<\/p>\n
Excluding sales by gas stations, retail sales rose by just 0.2 percent in August after climbing by 0.5 percent in July.<\/p>\n
“The solid increase in headline retail sales in August was not as good as it appeared as it was driven by a price-related surge in gasoline station sales while underlying goods and services spending lost momentum, and July’s gain was revised lower,” said Michael Pearce, Lead U.S. Economist at Oxford Economics.<\/p>\n
He added, “Consumption growth is still on track for a strong gain in Q3 overall, but with job and wage growth slowing, student loan repayments restarting, and borrowing conditions still tightening, the headwinds to consumer spending are mounting.”<\/p>\n