December 5, 2022

Retail Sales Flat in August

The unchanged reading followed a 0.3 percent gain for July that was smaller than previously estimated, the department said. Prices paid by producers were also unchanged in August, according to the Labor Department, while so-called core costs that exclude food and fuel rose less than forecast.

The dim outlook for household spending, which accounts for about 70 percent of the economy, will make it hard for the two-year-old recovery to gain speed, giving the Federal Reserve reason to take additional steps to spur growth.

“Consumers are being more cautious given all the economic headwinds,” said Michael Feroli, chief United States economist at JPMorgan Chase. “Policy makers have to be focused on growth because growth seems to have come close to stalling in August.”

Another report from the Commerce Department showed inventories rose less than forecast in July, indicating companies were bracing for a slowdown in demand. The 0.4 percent increase in stockpiles matched the revised gain in June, which was larger than initially estimated. The median projection in a Bloomberg News survey was for a 0.5 percent advance. Sales climbed 0.7 percent in July, the most since March.

The median forecast of retail sales by 83 economists surveyed by Bloomberg News called for a 0.2 percent rise. The Commerce Department revised the July increase down from a previously reported 0.5 percent advance.

Eight of 13 major categories showed gains last month, led by grocery and sporting goods stores. Demand declined for big-ticket items like automobiles and furniture. Sales at clothing stores dropped 0.7 percent, the biggest drop since December.

Retail sales are not adjusted for inflation, indicating demand may have dropped after taking prices into account.

Purchases at automobile dealers dropped 0.3 percent after rising 0.2 percent in July, the report showed. Cars and light trucks sold at a seasonally adjusted annual rate of 12.1 million in August, down from a 12.5 million pace in the first half of the year and little changed from July, according to the researcher Autodata.

Purchases excluding autos increased 0.1 percent, below the 0.2 percent projected by analysts.

Payrolls in the United States, the world’s largest economy, stagnated last month, and unemployment held at 9.1 percent, Labor Department figures showed earlier this month.

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