WASHINGTON – Spending at U.S. retailers fell in August with consumers buying fewer goods at home-improvement stores, car dealerships and online.
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Retail sales -- a key measure of consumer spending -- decreased a seasonally adjusted 0.2% in August from the prior month, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal had expected a 0.2% increase.
"Hurricane Harvey's fingerprints were all over the August retail sales report," said Scott Anderson, chief economist at Bank of the West, with the headline figure dragged down by a drop in auto sales.
Sales earlier in the summer were less robust than previously estimated. Retail sales increased a revised 0.3% in July, down from an originally reported 0.6% increase. Sales fell in June, down from prior estimate of an increase.
"It's clear given this morning's revised numbers consumer spending won't be as buoyant in the third quarter as it was in the second despite high consumer confidence and record-high stock prices," Mr. Anderson said.
The Commerce Department said it couldn't isolate the effect of Hurricane Harvey on retailers last month. The agency received mixed indications from companies on the hurricane's effects on sales. Some firms reported a drop in sales, the agency noted.
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"With the recent storms likely to have destroyed 300,000 vehicles, this should actually provide some support to auto sales in the months ahead," said Andrew Hunter, U.S. economist at Capital Economics, in a note to clients.
Excluding autos, an often volatile category, sales were up 0.2% last month. Economists had expected a 0.5% gain. Excluding both autos and gasoline, sales were down 0.1% in August.
Data on retail sales can be volatile from month to month, aren't adjusted for inflation and don't include spending on most services such as housing and health care.
Consumer spending is the main engine of the U.S. economy, accounting for more than two-thirds of total economic output.
Sales in August were soft in most categories. But gasoline-station sales rose 2.5% in August from the prior month, according to the Commerce Department report. That reflects higher prices at the pump. Gas prices surged in the wake of Hurricane Harvey, as Texas refineries temporarily shut down, but were up even before Harvey made landfall.
Sales were uneven across other categories last month. They nudged up at home furnishings stores and grocery stores. They declined at building material and garden stores and department stores, even though hurricanes typically translate into increased spending on preparations. Meanwhile, sales at nonstore retailers, mostly online-shopping outlets, fell 1.1% in August. That was the largest decline for the category since April 2014.
In addition to month-to-month volatility, weakness in online sales could be partly due to low inflation, as retailers lower prices, but struggle to drive traffic.
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(END) Dow Jones Newswires
September 15, 2017 10:25 ET (14:25 GMT)