Retail sales shoot up in August

New York City U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years, according to Commerce Department estimates, boosted by the government’s “cash-for-clunkers” program, higher gas prices and back-to-school spending. Excluding autos, retail sales rose 1.1%, the biggest increase since February, and well above the 0.4% expected by many analysts.

The report showed strength across most sectors, with the exception of furniture and building materials, with apparel stores, bookstores and department stores all reporting an increase in sales.

Sales tax holidays throughout the country, which fell a bit later this year than last, helped boost August retail sales on traditional school merchandise such as apparel and electronics. Sales at electronics and appliance stores increased 1.1% seasonally adjusted over July and decreased 10.7% unadjusted year-over-year. Clothing and clothing accessory stores sales increased 2.4% adjusted from the previous month and decreased 5.9% unadjusted from last year.

“Shoppers were a bit more comfortable digging into their wallets last month, and retailers are hopeful that we’ve turned a corner,” said Rosalind Wells, chief economist of the National Retail Federation. “It is encouraging to see some momentum building as retailers anticipate the all-important holiday season.”

Health and personal-care store sales also saw solid increases with sales increasing 0.4% seasonally adjusted from last month and 2.7% unadjusted over last August.

Sporting goods, hobby, book and music stores sales increased 2.3% adjusted over last month and decreased 1.7% unadjusted year-over-year.