Retail sales and food-services spending increased 0.4 percent in August following a 0.8 percent gain in July. Over the past year, total retail sales and food services were up 3.4 percent through August; for the first eight months of 2019, retail sales are up 3.3 percent compared to the same period last year.
Core retail sales, which exclude autos and gasoline station sales, were up 0.1 percent in August after a gain of 0.9 percent in July. The August rise was the sixth in a row, putting the six-month annualized growth rate at 8.1 percent, the second result above 8 percent in the past three months and just the third month since 2012 (see top chart). From a year ago, core retail sales are up 4.2 percent, in line with the annualized pace over the past eight and a half years.
Results from the various categories on the report were mixed, with gains in 6 retail-spending categories, declines in six, and one essentially unchanged. Gains were led by a 1.8 percent rise in motor vehicles and parts, a 1.4 percent gain for building material and garden equipment supply stores, and a 1.6 percent increase for nonstore retailers.
Nonstore retailers, primarily online shopping, continue to post strong increases compared to other segments. Over the past year, nonstore retail sales are up 16.0 percent, and for the eight months through August, sales totaled $487.3 billion, a gain of 12.1 percent over the same period last year. Continued outperformance by this segment has pushed nonstore sales as a share of core retail sales to a record high 17.9 percent (see bottom chart).
On the negative side, gas station sales were down 0.9 percent, though volatility in gasoline spending tends to reflect changes in prices rather than changes in volume. The average retail price for a gallon of gasoline was down 4.2 percent for the month of August. Lower expenditures at gasoline stations can mean more disposable income in consumers’ pockets. Also declining in August were sales at restaurants (-1.4 percent) and clothing stores (-0.9 percent).
Solid retail sales data for July and August are positive signs for third-quarter gross domestic product. However, the persistence of mixed economic data and uncertainty surrounding monetary and trade policy suggest continued caution.
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