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Economic News

United States: Retail Sales Edge past Expectations Again

September 14, 2023
Francis Généreux
Principal Economist


  • Retail sales rose 0.6% in August following a 0.5% increase in July (revised down from 0.7%).
  • Motor vehicle sales were up 0.3% after falling 0.4% in July. Gas station receipts jumped 5.2%. Excluding motor vehicles and gasoline, sales grew 0.2% after spiking 0.7% the month before.
  • Aside from gas stations and motor vehicles and parts, clothing stores (+0.9%) and electronics stores (+0.7%) were the major winners.
  • Meanwhile sales were down sharply at leisure goods stores (-1.6%), miscellaneous store retailers (-1.3%) and furniture stores (-1.0%).


Given today’s soaring interest rates, tighter credit conditions, relatively low consumer confidence and slowing job growth, the resilience of the US consumer is pretty remarkable. Retail sales were up 0.6% month-over-month in August, three times the 0.2% consensus forecast. And while the increase isn’t as impressive once you take out gas station receipts, which were inflated by the recent spike in gasoline prices, it doesn't look like the bottom is about to fall out of consumer spending anytime soon.

July and August sales were even consistent with higher real spending on goods in the third quarter (graph). Real goods consumption growth fell off sharply between the first and second quarters of this year, but we now expect it to post an annualized gain of more than 4%.

That said, August's 0.3% uptick in food services was the smallest monthly increase since March. This may be a sign that consumers are starting to pull back on discretionary spending. By the same token, sales of leisure goods were down in August and online shopping was flat. We’re forecasting further weakness in real goods and services spending over the fall and winter, reflecting the lagged effects of higher interest rates.


Retail sales growth came in stronger than expected in August, suggesting higher real consumption in the third quarter—though some retail categories are showing signs of a slowdown. But given everything we know, today’s report shouldn’t sway the Fed to raise rates again. We expect it to hold next week.