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Retail sales notch small gain in August despite slowing economy

woman online shopping
Online sales were flat in August after getting a spike in July from Prime Day.

Retail sales growth was sluggish in August as inflation continued and interest rates remained high.

Core retail sales in August  inched up 0.1% from July and were up 3.3% year-over-year, reported the National Retail Federation, whose calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail. In July, sales rose 0.7% month-over-month and increased 3.3% year-over-year.

“NRF’s numbers show the pace of retail growth cooled from July but that consumers are still active even as they continue to be selective and price sensitive,” said NRF chief economist Jack Kleinhenz said. “Households have the capacity to spend, but momentum is slowing, in part because savings built up during the pandemic are running lower and credit costs are rising.”

Although consumer spending growth has slowed, there is little hint “of any sudden collapse, “ added  Kleinhenz.

Overall retail sales rose  0.6% in August from July and were up 2.5% year over year, according to the U.S. Census Bureau.  The increase was attributed mostly to a spike in gasoline prices.  Excluding gas sales, overall retail sales in August edged up 0.2%. That compared with increases of 0.5% month over month and 2.6% year over year in July. (On a related note, U.S. wholesale prices accelerated in August,  largely because of higher gas prices, according to a report by the Labor Department.)

August sales had slight increases in all but two categories — furniture and sporting goods — on a monthly basis, led by and clothing and accessory stores; health and personal care stores and electronics stores. Online sales were flat with July, when they got a big bump due to Amazon Prime Day.


In a note, Fitch Ratings senior director David Silverman said Fitch continues to view the consumer as "relatively healthy," supported by low unemployment and somewhat declining inflation. 

"Headwinds are emerging, however, including lower consumer savings and potential budget impacts from the resumption of student loan payments this fall,"  he wrote "Fitch expects moderate retail sales growth, albeit driven by inflation, can continue in the near term,' but with continued volatility by category, particularly those with outsized growth during the pandemic."

Specifics from key sectors are below.

•Health and personal care stores were up 0.5% month over month and up 7.8% year over year.

•Online and other non-store sales were unchanged month-over-month but up 7.6% year over year.

•Clothing and clothing accessory stores were up 0.9% month-over-month and up 3.6% year-over-year.

•General merchandise stores were up 0.3% month-over-month and up 3% year-over- year.

•Grocery and beverage stores were up 0.4% month-over-month   and up 2.8%  year-over-year.

•Electronics and appliance stores were up 0.7% month-over-month but down 1.6% year-over-year.

•Sporting goods stores were down 1.6% month-over-month and also down 1.6% year-over-year.

•Building materials and garden supply stores were up 0.1% month-over-month but down 3.8% year over year.

•Furniture and home furnishings stores were down 1% month-over-month and down 7.6% year-over-year.


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