August retail sales are up, notes Commerce and NRF

August retail sales saw gains, driven by a few different factors, including rising wages and lower inflation, according to data issued today by the United States Census Bureau of the Department of Commerce and the National Retail Federation (NRF).

Commerce reported that total August retail sales, at $710.8 billion, increased 0.1% compared to July, while posting a 2.1% annual gain. From June through August, it said that total retail sales rose 2.3% annually.

For certain segments, Commerce noted that retail trade sales were up 0.1% over July and up 2.0% annually, and non-store retailers, which includes e-commerce, headed up 7.8% annually, with food services and drinking places seeing a 2.7% annual gain.  

NRF reported that its calculation of August retail sales, which is based on Census data and excludes automobile dealers, gas stations, and restaurants, saw retail sales rise 0.3% on a seasonally-adjusted basis month-over-month and were up 3.3% on an unadjusted basis annually.

It added that core retail sales headed up 3.4% annually through the first eight months of 2024, which matches up with NRF’s forecast of 2.5%-to-3.5% retail sales growth in 2024.

“These numbers show the continued resiliency of the American consumer,” said NRF Chief Economist Jack Kleinhenz. “While sales growth decelerated from last month’s pace, there is little hint of consumer spending unraveling. Households have the underpinnings to spend as recent wage gains have outpaced inflation even though payroll growth saw a slowdown in July and August. Easing inflation is providing added spending capacity to cost-weary shoppers and the interest rate cuts expected to come from the Fed should help create a more positive environment for consumers in the future.”

Neil Saunders, Managing Director of GlobalData, wrote in a research note that August’s numbers reflect how the consumer, while cautious, is still shopping and is taking advantage of lower gas prices and more deals in retail to buy things that they want, as well as the essentials they need.

“Back to school was also helpful to sales in August, with many households having started their shopping early to take advantage of the offers retailers have put out,” he said. “There is also a very small, but interesting, uplift from an early start to Halloween. We believe retailers are pulling the event forward in a bid to generate sales and get an early bite of the seasonal cherry. As we have noted previously, consumers are looking for excuses to spend and banner events like Halloween provide this. We also expect an earlier start to the holiday season in general as a shorter window between Thanksgiving and Christmas and uncertainty around the presidential election will nudge retailers into getting merchandise onto the shop floor. These things may well give some slight lift to sales in September and October, although this may be to the detriment of the last two months of the year.”

SC
MR