U.S. retail sales rose by less than forecast in August following an upwardly revised July gain as purchases of automobiles and clothing fell, suggesting households took a breather from spending.
The value of overall sales climbed 0.1% from the prior month after a 0.7% increase in July, Commerce Department figures showed Friday. The median forecast of economists surveyed by Bloomberg called for a 0.4% gain.
Combined results from July and August indicate support from a strong job market and more after-tax pay during the back-to-school shopping season. While household spending, the biggest part of the economy, continues to drive economic growth this quarter, still-tepid pay gains and higher borrowing costs are among reasons why it's projected to cool from its second-quarter pace.
The Commerce Department figures aren't adjusted for price changes. The data indicated that the biggest plunge in clothing prices since 1949 depressed August results, at the same time as higher gasoline costs gave them a boost.
Sales fell 1.7% at clothing stores, the biggest drop since February 2017. In contrast, receipts climbed 1.7% at filling stations, as Labor Department consumer-price data showed seasonally adjusted gasoline prices increased 3%, the most since April.
Estimates for retail sales in the Bloomberg survey ranged from a decline of 0.1% to a gain of 0.7%.
So-called retail control-group sales — which exclude food services, auto dealers, building-materials stores and gasoline stations — advanced 0.1% after an upwardly revised 0.8% gain. The median estimate was for a 0.4% increase.
Sales at auto and parts dealers fell 0.8%, the most since February, after decreasing 0.1% in the previous month, the Commerce Department data showed. According to industry reports for August, except Ford Motor Co., all major automakers' sales missed analyst estimates as demand plunged for passenger cars.
Excluding autos and gasoline, retail sales rose 0.2%, after an upwardly revised 0.9% gain the previous month.
The results also got less of a boost from restaurants and bars after three months of outsize gains. Receipts at food services and drinking establishments cooled to a 0.2% increase in August, following an upwardly revised 1.6% in July.
