You are here
US retail sales fall more than expected on weak autos
[WASHINGTON] US retail sales fell more than expected in August amid weak purchases of automobiles and a range of other goods, pointing to cooling domestic demand that could further diminish expectations of a Federal Reserve interest rate increase next week.
The Commerce Department said on Thursday retail sales declined 0.3 per cent after an upwardly revised 0.1 per cent gain in July. Retail sales in July were previously reported to have been unchanged.
Sales were up 1.9 per cent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales slipped 0.1 per cent last month after a downwardly revised 0.1 per cent drop in July.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have been unchanged in July.
Economists had forecast overall retail sales slipping 0.1 per cent and core sales climbing 0.3 per cent last month.
Coming on the heels of reports showing a slump in manufacturing activity in August and a slowdown in job growth, the retail sales data temper hopes of a strong rebound in economic growth in the third quarter.
The report also suggests the Fed will leave interest rates unchanged at its Sept 20-21 policy meeting. Fed Governor Lael Brainard said on Monday she wants to see stronger consumer spending data and signs of rising inflation before raising interest rates.
The Atlanta Fed is currently forecasting the economy growing at a 3.3 per cent annualized rate in the third quarter.
Auto sales fell 0.9 per cent last month and sales at service stations dropped 0.8 per cent. Sales at online retailers slipped 0.3 per cent and receipts at sporting goods and hobby stores decreased 1.4 per cent.
There were also declines in sales at furniture and building material stores. Receipts at clothing stores, however, rose 0.7 per cent. Sales at electronics and appliance outlets gained 0.1 per cent and receipts at restaurants and bars rose 0.9 per cent.