US retail sales jump 1.2% in August, signaling economic resilience amid inflation

Key facts

• US retail sales increased 1.2% in August, the largest monthly gain since March.
• Core retail sales, excluding autos, gasoline, building materials, and food services, surged 1.4%.
• Import prices rose 0.7% in August, exceeding expectations.
• Consumer spending is supported by stock market gains and reduced savings.
• Lower-income households are struggling with rising energy and food prices.

U.S. retail sales rebounded sharply in August, with households boosting purchases of a range of goods and services, including restaurants and bars, reinforcing the economy's resilience despite rising inflation. The Commerce Department's Census Bureau reported that retail sales jumped 1.2% last month, the largest increase since March, following a revised 0.5% drop in July. Economists had forecast a 0.8% rise. Sales increased 6.0% on a year-over-year basis.

Receipts at non-store retailers rose 2.6%, likely boosted by back-to-school shopping and a fading drag from an earlier Amazon Prime sales promotion. Sales at clothing stores climbed 0.7%, while vehicle and parts dealers saw a 0.6% increase. Electronics and appliance store sales jumped 1.6%, and sporting goods, hobby, musical instrument, and book retailers were 1.2% higher. However, sales at building material and garden equipment retailers fell 0.2%.

Core retail sales, excluding automobiles, gasoline, building materials, and food services, surged 1.4%, the largest gain since September 2024, after an unrevised 0.4% decline in July. This category is a key measure of consumer spending and is expected to contribute to upward revisions in third-quarter gross domestic product growth estimates.

In a separate report, import prices rose 0.7% in August, driven by strong increases in the costs of capital and consumer goods, surpassing economists' expectations of a 0.4% rise. This marked the largest increase since August 2022. The Federal Reserve on Wednesday raised its benchmark overnight interest rate by a quarter of a percentage point to the 3.75%-4.00% range and signaled further increases.