Consumer spending unexpectedly accelerated in August as back-to-school shopping bolstered sales.
Retail sales, a measure of spending at restaurants, stores and online, last month rose 0.7% to $618.7 billion, according to the Commerce Department. Analysts surveyed by Refinitiv had expected a 0.8% decline. The reading was 15.1% above year-ago levels.
Last month’s print was revised down to a drop of 1.8% from a 1.1% decline.
"Consumers have continued to spend robustly even after the stimulus sugar-high has worn off," said Ted Rossman, senior industry analyst at Bankrate. "That’s a good sign for the economy."
Clothing and clothing accessories sales rose 3.3% month over month and were 38.3% above year-ago levels. Gasoline sales jumped 1.6% compared to July.
Retail sales excluding autos jumped 1.8% month over month compared with the 0.1% decline that was anticipated. Auto sales declined 3.6% last month.
While the headline number was strong, the breakdown within the report suggested some hesitation due to the COVID-19 delta variant.
Nonstore spending increased 5.3% and food and beverage store sales rose 1.8%, "perhaps reflecting Delta-driven fears pushing consumers back to shopping from and eating at home," said Michael Pearce, senior U.S. economist at Capital Economics.