Retail Sales Down 0.3%; Ex-Autos Drop 0.7%

U.S. August retail sales were dismal, with a weaker-than-expected result of a 0.3% decrease and downward revisions to prior months’ sales suggesting a very weak consumer.

Sales excluding autos printed down 0.7%, and ex-auto and gasoline sales fell 0.4%. Details of the report show weakening across most categories as furniture sales were flat, electronics declined 1.3%, building materials fell 2.2%, gasoline dropped 2.5%, and mail/Web sales slid 2.3%.

Gains were posted in necessities: food was up 0.7%, health care rose 0.2%, and restaurants increased 0.2%. An oddity was sporting goods at plus 0.5%, but mainly this is a recession-like result.

June-July non-auto sales were revised down — July went to negative 0.5%. Third-quarter non-auto buying is floundering, with 3.4% seasonally adjusted annual rate growth probably not rising above the run-rate for inflation. This suggests weak but possibly still positive gross domestic product growth if the August consumer price index is negative.

Motor vehicle and parts sales rose 1.9%, and this marks only the fourth time in the last year that a month posted a gain. The other times were January, and August-September 2007. That is not a strong result for the auto industry.

The year-over-year gain in overall retail sales was up 1.6%, also a very slow pace.

— Market News International

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