ARLINGTON, Va.—Total retail sales grew in August following a decrease of 0.4% in July.
“Despite the Fed's efforts to cool down the economy, retail sales growth outpaced inflation in August,” said NAFCU Chief Economist and Vice President of Research Curt Long. “That was offset by a downward revision to July resulting in a 0.4% decline.”
Sectoral performance was mixed in August. Motor vehicle and parts dealers saw the biggest increase with a 2.8% growth in sales, followed by miscellaneous store retailers (1.6%). That growth was partially offset by declining sales at gasoline stations (-4.2%), followed by furniture and home furnishing stores (-1.3%).
Year-over-year growth in retail sales were up 9.4% in August. Control group sales – which excludes auto gas, and building material categories – were up 7.4% from a year ago.
Auto Leads the Way
“Auto retailers led the way in August, a surprise given the ongoing supply chain issues,” noted Long. “As the price of oil has declined, so too have sales at gas stations.”
“Retail sales data primarily capture spending in the goods sector and may miss the effect of consumers rotating back to services,” added Long. “This is another data point supporting a hawkish posture from the Federal Reserve.”
“While a 100-basis point hike is in play for next week, NAFCU continues to expect a 75-point move,” concluded Long.