February 26, 2024

Retail Sales and Producer Prices Unchanged in August

Consumers spent less on autos, clothing and furniture in August, leaving retail sales unchanged, the government reported.

The Commerce Department also said retail demand in July was weaker than first thought.

Auto sales fell 0.3 percent in August. Sales at clothing stores declined 0.7 percent. Gasoline sales rose.

The flat reading for retail sales was a surprise, given private reports from retailers and auto dealers that suggested a brighter picture in August.

Major automakers reported healthy sales increases in August, largely because dealers introduced new models and offered cheaper financing. The nation’s major retailers reported solid results from the all-important back-to-school shopping.

A weak month for retail sales suggests growth may struggle to gain momentum in the second half of the year. Consumer spending accounts for 70 percent of economic activity in the United States.

Still, most categories were higher compared with a year ago. Auto sales were 6.9 percent higher than in August 2010, and clothing stores were 5.6 percent higher.

Also Wednesday, the Labor Department reported that companies paid the same amount for wholesale goods last month, as a drop in energy prices offset higher food costs.

Excluding the volatile food and energy categories, core wholesale prices edged up 0.1 percent, the smallest increase in three months. The figures indicate that inflation pressures are easing.

The Producer Price Index, which measures price changes before they reach the consumer, was unchanged in August, the Labor Department said, after a 0.2 percent rise in July.

Core prices rose 2.5 percent in the past 12 months, the same pace as July.

Food prices rose 1.1 percent in August, the largest increase since February. Wholesale gasoline prices, meanwhile, fell 1 percent in August, and home heating oil dropped 1.2 percent.

Sharp increases in the prices of oil, food and other commodities pushed up most measures of inflation earlier this year. But now that many commodities are becoming less expensive, inflation pressures are fading.

That has taken some of the pressure off the Federal Reserve to keep inflation in check by raising interest rates. Instead, the central bank can keep the short-term rate it controls at nearly zero, in an effort to support economic growth.

Article source: http://feeds.nytimes.com/click.phdo?i=9dcb506e3308f05ed17619924366e748

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