For Aug’19 US Retail Sales Rose as Auto Buying Jumped

In August, U.S. retail sales rose moderately driven higher by a jump in auto buying and healthy online sales. The Commerce Department says retail sales increased 0.4% last month, down from a healthy 0.8% in July. Excluding autos, sales were unchanged for the first time since February.

The modest slowdown follows signs that consumer confidence, while still strong, has slipped a bit as the U.S.-China trade war has intensified. U.S. businesses have cut back on their investment and expansion plans amid the trade war’s uncertainty and exports have declined. That has left consumers as a key source of growth.

Online sales continued to soar, rising 1.6%, roughly the same amount as in July, when Amazon held its Prime Day.

Retail sales have been strong for most of this year, and most economists have expected sales to slow from that healthy pace.

Home and garden centers reported a strong 1.4% gain, which may have been partly spurred by preparations for Hurricane Dorian. Sales at sporting goods and health care stores also rose.

Retail sales make up about one-third of consumer spending, with the rest consisting of services such as haircuts and medical care. Consumer spending, in turn, accounts for about 70% of economic activity.

Consumers are still mostly optimistic about the economy. But the University of Michigan’s consumer sentiment index fell by the most in seven years in August as more Americans worry about the impact of tariffs.

The retail sales report comes as the divide between retail winners and losers is widening. Big box stores like Target and Walmart and off-price retailers have been responding faster to shoppers’ increasing shift online by offering better bargains and convenient services like same-day deliveries. But many mall-based clothing chains and department stores continue to suffer weak sales as they struggle to lure in shoppers. Many have been straddled with excessive debt and been hurt by overexpansion.

Sources :- The Leaders Globe