US retail sales rise more than expected in August as auto sales surged

By RetailFOXBusiness

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U.S. retail sales rose more than expected in August boosted by purchases of new autos and building supplies, suggesting the economy remained strong, even as fears over an impending slowdown continued to mount.

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The Commerce Department said on Friday that retail sales climbed by 0.4 percent in August, well above analyst expectations of 0.2 percent, on the heels of blowout data in July, when households boosted purchases of cars and clothing.

"Healthy consumer spending is being driven by the good jobs market and increasing wage growth, two powerful factors that can overwhelm anxiety-generating events that can curtail spending," said Robert Frick, corporate economist at Navy Federal Credit Union.

The better-than-expected number stemmed largely from a 1.8 percent jump in spending vehicles. Online sales, meanwhile, also continued to climb, rising 1.6 percent. That's similar to July, when Amazon held its two-day, blowout Prime Day sale.

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The U.S. consumer has remained relatively resilient in the face of a darkening economic outlook as uncertainties from the U.S.-China trade war continue to rattle markets.

The report is the last big economic report before the Federal Reserve's two-day meeting next week, during which policymakers are widely expected to lower interest rates.

"The manufacturing and agricultural sectors in the U.S. are being hit by the trade war, but the consumer remains healthy and is keeping overall economic growth at or even slightly above trend," David Berson, Nationwide's chief economist, said in a statement. "Today’s data are yet another reason to expect that the Federal Reserve will ease policy by only 25 basis points at next week’s FOMC meeting, rather than by a larger 50 basis points."

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