London
20 °C
Manchester
Glasgow
18 °C
Dublin
Belfast
Washington
Denver
20 °C
Atlanta
24 °C
Dallas
Houston Texas
New Orleans
El Paso
Phoenix
Los Angeles
19 °C
28 °C
12 °C
16 °C
24 °C
US retail sales see slight rise, beating expectations / Photo: MARIO TAMA - GETTY IMAGES NORTH AMERICA/AFP/File
US retail sales see slight rise, beating expectations
US consumer spending rose only slightly in August, government data showed Tuesday, with consumers appearing to shift towards essentials in the face of high interest rates.
Overall retail sales rose unexpectedly by 0.1 percent from July to August at $710.8 billion, defying analysts' anticipation of a 0.2 percent decline, according to Department of Commerce data.
The figures reflect tepid sales at auto dealers and gas stations, the agency said.
Sales at motor vehicle and parts dealers slipped 0.1 percent from a month ago while those at gas stations dropped 1.2 percent.
Spending at food and beverage stores fell as well, as did those at furniture and clothing stores.
But online retailers had a better showing, with sales up 1.4 percent, the report said.
Excluding autos and gas stations, overall retail sales were up 0.2 percent.
- 'Rising stress' -
Looking ahead, Nationwide financial markets economist Oren Klachkin said: "The health of the labor market holds the keys to whether aggregate spending holds up or deteriorates from here."
A small interest rate cut kicking off a cycle of easing goes towards supporting employment.
On August's numbers, Klachkin said: "Gains were concentrated in a few categories, and the data suggest consumers are tilting away from discretionary toward essentials –- usually a telltale sign of rising stress."
"The consumer is running out of steam," said Dan North, senior economist at Allianz Trade North America.
One reason is that real disposable income -- or income after inflation and taxes -- has declined as have consumers' excess savings, North told AFP.
Analysts do not expect the latest figure to have a major impact on the Federal Reserve's calculus this week as it decides the size of expected rate cuts.
But it will be factored in as officials embark on a gradual path towards lowering rates as inflation cools.
"It's very clear that rate cuts are coming, the market is basically expecting (a cut of) 25 basis points," North said.
But economist Michael Pearce of Oxford Economics added: "We think the economy will remain solid, so we anticipate a measured easing cycle from the Fed, in contrast to the rapid cuts priced in by markets."
F.Colin--PS
