Retail sales in the US unexpectedly jumped to 0.7% mom in August, following an downwardly revised 1.8% decline in July, and beating market forecasts of a 1.0% drop. Sales rose the most for nonstore retailers (5.3%), furniture (3.7%), general merchandise stores (3.5%) and food and beverages stores (1.8%). Sales also went up for miscellaneous stores (1.4%), building material & garden equipment (0.9%), gasoline stations (0.2%) and health (0.2%). Auto sales fell 3.6% due to product shortages. Other decreases were also seen for electronics stores (-3.1%) and sporting goods, hobby, musical instrument and books (-2.7%). Retail sales excluding autos surged to 1.80% mom in August from downwardly revised -1.0% decline in the previous month. Figures beat market forecasts of a 0.2 percent fall, according to the US Census Bureau. Today's reading was quite surprising, but the base was low, so it was not so difficult to achieve positive dynamics.
Despite a rise in COVID-19 cases, Americans kept shopping last month. The retail sales strength in August was only partially offset by downward revisions to July data. Source: Bloomberg via ZeroHedge
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Create account Try a demo Download mobile app Download mobile appAlso the delta variant has changed where Americans spend their time and money. JP Morgan, in its study based on credit card spending, showed that consumer spending is increasing, which on the one hand may indicate a declining impact of the Delta variant. In addition, many US citizens are returning to the job market, which could boost sales in the coming months. On the other hand, online sales jumped 5.5% in August, while sales at restaurants and bars, many of whom believed they were through the worst of the pandemic, were flat from the month before.
Investors now focus on the FOMC decision next week for further details on when the Fed will start tapering. Today's reading itself should not significantly affect the Fed's decisions, however, taking into account the latest data, the state of the US economy does not look bad, therefore it cannot be ruled out that the central bank will provide some hints regarding the tapering plan.
