Retail Sales in U.S. Rose in August

Daily Herald (Arlington Heights, IL), September 13, 2014 | Go to article overview

Retail Sales in U.S. Rose in August


Byline: Bloomberg News

Sales at retailers climbed in August at the fastest pace in four months and prior readings were revised up, boosting prospects for U.S. economic growth this quarter.

The 0.6 percent gain matched the median forecast of 82 economists surveyed by Bloomberg and followed a 0.3 percent increase the prior month that was stronger than previously reported, Commerce Department figures showed today in Washington. Eleven of 13 major categories showed advances, led by auto dealers and building material stores.

More hiring, stock-market gains and cheaper prices at the gas pump put Americans in the mood to shop, providing a lift to the expansion that's now in its sixth year. Faster wage growth would provide a bigger boost for consumer spending, which accounts for almost 70 percent of the economy.

"The momentum in sales is fairly positive," Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, said before the report. "Increases in confidence and employment argue for more gains in consumer spending."

Stock-index futures held earlier losses after the report. The contract on the Standard & Poor's 500 Index maturing in December fell less than 0.1 percent to 1,987.6 at 8:34 a.m. in New York.

Survey Results

Estimates in the Bloomberg survey ranged from advances of 0.1 percent to 1.2 percent. July retail sales were previously reported as little changed from a month earlier. June was revised up to show a 0.4 percent increase from a previously reported 0.2 percent gain.

Sales climbed 1.5 percent at automobile dealers, the best showing since March, after a 0.6 percent increase the prior month.

Industry figures indicate Americans continue to spend on vehicles. Sales of cars and light trucks rose to a 17.5 million annualized rate in August, the highest since January 2006, from a 16.4 million pace a month earlier, according to data from Ward's Automotive Group.

"We're going to close out the year with the highest production plan we've had in seven years," Bill Fay, Toyota Motor Corp.'s U.S. sales chief, said on a conference call this month. "Consumer confidence is up, spending growth is out there in the marketplace, interest rates are stable, fuel prices are stable. It's pretty darn close to ideal."

Ex Autos

Retail sales excluding autos increased 0.3 percent in August for a second month, today's report showed. That matched the median forecast of economists surveyed by Bloomberg.

Spending increased 1.4 percent at building-material stores, 0.7 percent each at furniture and electronic merchants and 0.9 percent at sporting goods outlets, today's report showed.

Two categories showed weakness with sales declining at service stations and general merchandise chains, which include department stores. The Commerce Department's retail sales data aren't adjusted for prices, so the drop at gasoline stations may reflect lower costs at the pump.

Regular gasoline sold at an average $3.42 a gallon as of Sept. 10, the lowest in more than six months, according to AAA, the biggest U.S. motoring group. Lower fuel prices are freeing up money for consumers to spend elsewhere.

Another report today showed a decline in the cost of oil helped push down prices of imported goods by 0. …

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