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U.S. Retail Sales Rose 0.3% in August as Pressure from Gas Prices Eased

Economic Indicators Sep 15, 2022 08:38AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. retail sales rose surprisingly in August by 0.3%, as a fall in gasoline prices prompted consumers to drop some of their recent caution with regard to other areas of spending.

Spending on autos and parts rose a hefty 2.8%, while there were also notable gains for general merchandise stores, hospitality venues and sporting goods shops. 

Despite that, however, core retail sales, which exclude spending on autos, fell 0.3% on the month, a sign that the highest inflation in 40 years is depressing demand.  That weakness was also evident in the Census Bureau revising down its estimate for July's retail sales to show a drop of 0.4%.

Overall, retail sales were up 9.1% from August last year, which equate to an increase of less than 1% when adjusted for inflation.

The figures have been made harder to interpret by the big drop in gasoline prices over the month, which eased the squeeze on consumers' more disposable income. Sales at gas stations fell 4.2%, while sales excluding gasoline and autos rose 0.3%.

The trend in retail sales has been gradually weakening throughout the year as consumers use up the savings that they accumulated during the pandemic. It is, however, still being supported by the strength of the labor market, where initial claims for jobless benefits continued their summer decline last week to stand at only 213,000. their lowest since May.

Other data published on Thursday were more consistent with the retail sales numbers than with jobless claims. U.S. industrial production, meanwhile, fell for the second time in three months, by 0.2%, missing expectations for an unchanged reading. 

The Philadelphia Federal Reserve's index of manufacturing activity also fell to -9.9, with slowdowns in all of the main subindexes for new orders, employment, capital spending and, crucially, prices paid

Price pressures in the economy appear to be easing in part because of the normalization in freight markets, as China overcomes the problems it suffered earlier in the year with the lockdown of key ports such as Shanghai. Import price data published on Thursday showed a second straight fall in August, by 1.0%, while the backlog of ships waiting to dock at Los Angeles' Long Beach port has fallen from over 100 in May to 20 as of this week. 

U.S. Retail Sales Rose 0.3% in August as Pressure from Gas Prices Eased
 

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Comments (12)
Casador Del Oso
Casador Del Oso Sep 15, 2022 10:12AM ET
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I guess that reality doesn't matter. Inflation is caused by excessive fiscal spending.
Kerry Ditto
Kerry Ditto Sep 15, 2022 9:53AM ET
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what if xi convince Russia to get a peace deal with ukraine? highly likely
Kerry Ditto
Kerry Ditto Sep 15, 2022 9:35AM ET
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deflation warnings from commodities tell stop the rate hiking now
TheEnd IsNigh
TheEnd IsNigh Sep 15, 2022 9:32AM ET
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I hope Brad Albright is getting paid well by the Biden administration to try and combat the reality of what's going on. Hey, Brad...did you know a recession is no longer defined as two consecutive quarters of negative growth in GDP? Just wanted to make sure you had the latest talking points. You're doing a great job, buddy.
Brad Albright
Brad Albright Sep 15, 2022 9:32AM ET
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Thanks! Actually, I'm getting paid by the globalist cabal and I get adrenochrome credits every time someone responds. So, thanks again! Whoohoo!
Kerry Ditto
Kerry Ditto Sep 15, 2022 9:27AM ET
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Fed's obsession with rate hiking is the problem. there is no real inflation. instead it looks deflation lurking.
Kerry Ditto
Kerry Ditto Sep 15, 2022 9:16AM ET
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natural gas price falling big might mean peace deal between Europe and russia?
Ken Roth
Ken Roth Sep 15, 2022 9:16AM ET
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Solely because of tentative deal with US railworkers
Steven ML
Steven ML Sep 15, 2022 9:09AM ET
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"Core retail sales dropped as more and more people struggle to make ends meet"
Oluwafisayo Aknlosotu
Oluwafisayo Aknlosotu Sep 15, 2022 9:03AM ET
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What about the core retail sales thal FELL!!!!
Brad Albright
Brad Albright Sep 15, 2022 9:03AM ET
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Dude, relax. That's in the article.
Steven Lail
Steven Lail Sep 15, 2022 8:57AM ET
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A full point raise from the Fed looking more likely.
Brad Albright
Brad Albright Sep 15, 2022 8:55AM ET
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A mixed bag; keeping in line with a soft landing scenario.
 
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