The Commerce Department reported(.pdf) that U.S. retail sales rose 0.9 percent in August, following a downwardly revised gain of 0.6 percent in July, rising gasoline prices and strong automobile sales pacing the recent gains. Excluding autos, sales rose 0.8 percent for the second straight month, but, excluding both autos and gasoline, sales were up only 0.1 percent last month after a surge of 0.8 percent.
Clearly, the August gains were driven by rising pump prices as gasoline station sales jumped 5.5 percent, but, when looking back at the last two months following data for the first half of the year that, to some degree, was affected by seasonal adjustment distortions, sales are picking up.
Only three of the 13 major categories declined in August, led by a drop of 1.4 percent in sales at consumer electronics stores (perhaps in anticipation of the new iPhone) while auto sales rose 1.7 percent and, in a sign of ongoing recovery in the housing market, sales at home improvement stores rose 1.0 percent.
In a separate report from the Labor Department, after two months of flat overall consumer prices, inflation jumped 0.6 percent in August, paced by big increases in energy prices and rising food prices, however, the cost of most other products saw only modest gains.
Energy prices were up 5.6 percent last month, down 0.6 percent from a year ago, as August’s gains were paced by a surge of 9.0 percent in gasoline prices and 4.6 percent for fuel oil. Food prices rose 0.2 percent and are now up 2.0 percent on a year-over-year basis, about the same as so-called “core inflation” (excluding food and energy) that rose 0.1 percent last month and is 1.9 percent higher than this time last year.
About The Author - Tim Iacono, a retired software engineer living in Bozeman, Montana, is the founder of Iacono Research. (EconMatters author archive here.)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
© EconMatters All Rights Reserved | Facebook | Twitter | Post Alert | Kindle