US retail sales slow on cooldown in cars, petrol spending
The slower sales figure is not expected to have a major impact on the US Federal Reserve’s calculus as it mulls over the size of rate cuts, an economist says
US CONSUMER spending weakened in August with retail sales slowing to a near-flat level while interest rates stayed high, indicated US government data released on Tuesday (Sep 17).
Overall retail sales were up 0.1 per cent from July to August at US$710.8 billion, though this beat analysts’ expectations, data from the US Department of Commerce showed.
Analysts had expected a 0.2 per cent decline, noted market analysis website Briefing.com.
The latest figures were bogged down by tepid sales at car dealers and petrol stations, the report said.
Sales at motor vehicle and parts dealers slipped 0.1 per cent from a month ago, while those at petrol stations dropped 1.2 per cent.
The US Commerce Department also noted that spending at food and beverage stores fell as well, as did those at furniture and clothing stores. Excluding cars and petrol stations, retails sales rose 0.2 per cent.
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“The consumer is getting, in my mind, less and less resilient,” said Dan North, senior economist at Allianz Trade North America.
One reason is that real disposable income – referring to income after inflation and taxes – has declined, as have consumers’ excess savings, North added.
But he does not expect the slower sales figure to have a major impact on the US Federal Reserve’s calculus this week when the central bank mulls the size of expected interest rate cuts.
“It’s very clear that rate cuts are coming, the market is basically expecting (a cut of) 25 basis points,” North said.
However, he added that the data will be among indicators the US central bank will consider as it proceeds with a gradual approach to rate reductions. AFP
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