August Retail Sales - Broad Advance Highlights Resilient Consumer

U.S. retail sales rose more than expected in August, with broad-based gains highlighting resilient consumer spending. Nominal sales increased 6.0% year-over-year and 1.2% month-over-month, while inflation-adjusted spending rose 2.6% and 0.8%, respectively. The report suggests consumers—the key driver of economic growth—continue to power through higher energy prices and persistent inflation. Taken together with signs of labor-market resilience and inflation remaining above the Fed’s target, the August data leave little doubt that policymakers will announce a rate hike this afternoon.

• Real (inflation adjusted) retail sales rose 2.6% year-over-year.  In August, retail sales grew 6.0% nominally netting real growth of 2.6% after adjusting for 3.4% inflation.  Higher spending at gasoline stations (+21.0%) was a key driver with additional strength from brick and mortar retailers (+14.0%) and online sales (+9.9%).  Nine of thirteen categories advanced in real terms.          
• Real (inflation adjusted) retail sales rose 0.8% month-over-month.  In August, nominal retail sales levels increased 1.2% (vs. consensus expectations for +0.8%) compared to July netting real growth of 0.8% after adjusting for 0.4% inflation.  Similar to the year-over-year story, higher spending at gasoline stations (+3.1%) was a key driver with additional strength from both online and brick and mortar retailers (+2.6% and +1.9%, respectively).  Eleven of thirteen categories advanced in real terms.