In what may be a sign that the U.S. consumer is not as bulletproof or eager to spend as some observers thought, sales at U.S.-based retailers slipped more than had been forecast last month. The read-through indicates that the biggest engine pulling the U.S. economy — and, by extension, many other parts of the world — paused, at least in August.
As recorded by the Commerce Department, purchases were off by 0.3 percent as measured against July numbers, which represents the first actual decline in five months and comes after a revised 0.1 percent advance in July. The 0.3 percent number just reported is worse than the 0.1 percent decline that had been projected by consensus, across several economists surveyed by Bloomberg. The headline number, adjusted to exclude a slide in auto sales, was also down by 0.1 percent. Sales declined in seven of the 12 categories tracked by the Commerce Department in addition to autos.
It should be noted that this is one of the last “major” economic reports being released ahead of the Federal Reserve’s meeting next week and may presage a continued reticence to raise benchmark interest rates (and risk choking off consumer spending even more). As July data was revised downward (though still marking growth), the impact of online sales — and, in particular, Amazon Prime Day during that month — was obviously not enough to pull much weight away from the decline at traditional stores.
In August, buying at building materials stores was off 1.4 percent (perplexing in light of continued strength in the housing market), while retail sales at sporting goods, books and music were off the same amount. Conversely, food and beverage store sales gained 0.3 percent; clothing was up 0.7 percent. This latter metric could be tied to back-to-school spending, which is a shortlived phenomenon.