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WASHINGTON – US consumers reduced spending in August and took a breather after very strong sales growth in July.
Sales in retail stores and restaurants rose 0.1% from the previous month, reaching $ 509 billion in August, the Commerce Department said Friday.
That was well below the 0.4% increase expected by economists surveyed by the Wall Street Journal. Compared with August a year earlier, sales rose 6.6%.
Nevertheless, the revised data showed that retail sales increased by 0.7% in July, up from the originally planned increase of 0.5%.
August's general weakness is mainly due to lower car sales. Sales by car and auto parts dealers were down 0.8% from the previous month.
Excluding motor vehicles, sales rose 0.3% in August and, excluding gasoline, sales fell 0.1%. Excluding both categories, sales increased 0.2% last month.
Consumer spending is a key driver of the US economy, accounting for about two-thirds of economic output.
Spending in grocery stores remained flat during the month and US spending on bars and restaurants edged up 0.2%.
Gas prices for US drivers averaged $ 2.84 per gallon in August, down 1 percent from July, according to the US Energy Information Administration, and consumers were spending more on gas stations. In August, sales at gas stations increased 1.7% and increased 20.3% over the previous year.
Retail sales data can be volatile from one month to the next. Department store sales decreased 1% in August and those of clothing stores 1.7%.
Sales at non-retailers, such as purchases made online or from mail-order catalogs, increased 0.7% and were up 10.4% from last August.
Online sales boosted the brands in the second quarter, marked by high consumer spending.
Walmart
,
Target
Corp.
,
Home Depot
Inc.
and
Nordstrom
Inc.
All recorded strong sales for the quarter.
One of the last big retailers to declare their profits,
Kroger
Co.
, said Thursday that its sales grew less than expected in its last quarter. The largest chain of supermarkets in US stores and sales said it would sacrifice its profits to continue investing in online ordering and other services to compete
Amazon.com
Inc.
and Walmart Inc.
"We are making these investments and they are substantial and significant," said Rodney McMullen, CEO of Kroger, in an interview about digital competitions.
The report released Friday by the Department of Commerce indicates that consumer spending continued to be strong at the beginning of the third quarter, but could cool slightly.
The Federal Reserve is closely monitoring consumer spending data as a measure of economic growth, and Fed officials have pointed to a recovery in consumer spending in the decision to raise interest rates in June by 1.75% to 2%. %. It is generally expected that rates will rise again by a quarter of a percentage point later this month.
Write to Harriet Torry at [email protected] and Sarah Chaney at [email protected]
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