Tuesday, 19 February 2019
Latest news
Main » August Retail Sales Post Steeper Decline than Expected

August Retail Sales Post Steeper Decline than Expected

16 September 2016
August Retail Sales Post Steeper Decline than Expected

Auto sales fell 0.9 percent last month and sales at service stations dropped 0.8 percent. The retail-sales report, and Friday's consumer-price index report from the Labor Department, will be among the last major points of economic data Fed officials will see before meeting next week.

Despite the drop in retail sales last month, consumer spending will likely remains supported by a strong labor market.

- PPI excluding food, fuel and trade services rose 0.3 percent from prior month and climbed 1.2 percent from August 2015.

USA retail sales slumped in August as auto and gasoline purchases fell and a core reading was unexpectedly weak, raising questions about consumer spending growth in the current quarter.

Manufacturers have struggled for the past 18 months with sluggish global growth, the strong dollar, and reluctance among USA businesses to spend more on large machinery and equipment.

Those more than offset increases of 0.9% at bars and restaurants and 0.7% at clothing stores.

The so-called core PPI increased 1.2 percent in the 12 months through August, the biggest gain since December 2014. In better news, July retail sales were revised higher to reflect a 0.1% gain; the earlier report showed flat sales.

Another issue considering industrial production was demand weakness in manufactured goods via textiles and machinery, and also from utilities.

Lower than expected sales across all three key metrics for the month will trigger fresh doubts surrounding the outlook for consumer spending, especially as the July data was also disappointing, although there is still an important element of correction after strong sales during the second quarter.

- Mining production rose 1 percent, the strongest advance in a year as oil drilling continued to pick up with prices. It increased 0.8 percent in June.

In the wake of the dour reports, the Atlanta Fed lowered its third-quarter GDP estimate by three-tenths of a percentage point to a 3.0 percent annual rate. The output from utilities, supposedly from weather rather than the economy, was down 1.4%. And the overall retail figure partially reflects the price of gasoline and automotive purchases, which don't necessarily show underlying demand.

Industrial output fell 0.4% last month after a downwardly revised 0.6% increase in July.