U.S. Retail Sales Rose 0.3% in August, Showing Resilience in Face of Inflation

Much of August’s gain was due to higher spending on vehicles, with purchases at motor vehicle and parts dealers up 2.8% on the month. A measure of spending that strips out vehicle sales declined 0.3% from July. Stripping out both vehicle and gasoline spending, retail sales rose 0.3%.

Retail sales, unlike many government reports, aren’t adjusted for inflation. So the latest reading reflects a combination of consumer demand and higher prices. Broad consumer prices rose 0.1% in August on the month, the Labor Department said earlier this week. Prices were up 8.3% from a year earlier, keeping inflation near a four-decade high.

Retail spending, which mostly encompasses spending on goods such as furniture, vehicles and groceries, has largely remained resilient in recent months despite inflationary pressures and rising interest rates that make car loans more expensive.

Concerns about the pace of price increases remain at the forefront for American households, according to surveys of consumer sentiment. Still, surveys by the University of Michigan and the Conference Board both improved in August as consumer expectations about the economic outlook rose.

Thomas Dennison, a retired engineer living in Clearwater, Fla., said he is consolidating car trips to save on gasoline, and tries to use his motorcycle when possible as it gets better fuel mileage than his car. He is also buying store brands and cutting down on dining out.

Mr. Dennison and his spouse are increasingly socializing with friends and families in each others’ homes rather than going out for dinner. The couple dines out once rather than twice a week, and usually at an inexpensive barbecue place. “We haven’t gone to a nice restaurant in months,” the 67-year old said.

Penelope Smiley,

a marketing executive based near Milwaukee, purchased folders, crayons and other educational items for her two sons over the course of the summer instead of waiting until the back-to-school season.

“I started paying attention to all of the sales more than I typically would,” she said.

Write to Harriet Torry at [email protected] and Austen Hufford at [email protected]

Much of August’s gain was due to higher spending on vehicles, with purchases at motor vehicle and parts dealers up 2.8% on the month. A measure of spending that strips out vehicle sales declined 0.3% from July. Stripping out both vehicle and gasoline spending, retail sales rose 0.3%.

Retail sales, unlike many government reports, aren’t adjusted for inflation. So the latest reading reflects a combination of consumer demand and higher prices. Broad consumer prices rose 0.1% in August on the month, the Labor Department said earlier this week. Prices were up 8.3% from a year earlier, keeping inflation near a four-decade high.

Retail spending, which mostly encompasses spending on goods such as furniture, vehicles and groceries, has largely remained resilient in recent months despite inflationary pressures and rising interest rates that make car loans more expensive.

Concerns about the pace of price increases remain at the forefront for American households, according to surveys of consumer sentiment. Still, surveys by the University of Michigan and the Conference Board both improved in August as consumer expectations about the economic outlook rose.

Thomas Dennison, a retired engineer living in Clearwater, Fla., said he is consolidating car trips to save on gasoline, and tries to use his motorcycle when possible as it gets better fuel mileage than his car. He is also buying store brands and cutting down on dining out.

Mr. Dennison and his spouse are increasingly socializing with friends and families in each others’ homes rather than going out for dinner. The couple dines out once rather than twice a week, and usually at an inexpensive barbecue place. “We haven’t gone to a nice restaurant in months,” the 67-year old said.

Penelope Smiley,

a marketing executive based near Milwaukee, purchased folders, crayons and other educational items for her two sons over the course of the summer instead of waiting until the back-to-school season.

“I started paying attention to all of the sales more than I typically would,” she said.

Write to Harriet Torry at [email protected] and Austen Hufford at [email protected]