UPDATES WITH COMMENTS FROM CONFERENCE BOARD CHIEF ECONOMIST
By Ovunc Kutlu
ISTANBUL (AA) - US retail sales increased 0.1% to reach $710.8 billion in August, beating market estimates, according to advance figures released on Tuesday by the US Commerce Department.
The estimate was for the figure to show a decline of 0.2%.
The July figure, on the other hand, was revised up from a gain of 1% to an increase of 1.1% for $710.8 billion.
Retail sales were up 2.1% in August, compared to the same month last year.
"Total sales for the June 2024 through August 2024 period were up 2.3 percent from the same period a year ago," the agency said in a statement.
Retail trade sales, meanwhile, were up 0.1% in July from the previous month, and were up 2% compared to the same month last year.
The gains indicate that consumer demand remains high in the world's largest economy.
Dana Peterson, chief economist at research organization the Conference Board, said retail sales over the July-August period were 3.3% annualized above the second quarter.
This suggests that the third quarter consumer spending growth will still be positive even if consumption momentum slowed over the course of the quarter, she said in a statement.
"We project real GDP will grow by 0.8 percent annualized in Q3," Peterson added.
"Weak nominal and real retail sales in August may have reflected a pullback in spending after July’s splurge, but also concerns about recession in the aftermath of the August equity market meltdown and increasing worries about the labor market," she explained.
Peterson said the most recent retail sales data is not expected to alter the Federal Reserve’s decision about the path of monetary policy rates on Wednesday.
The Conference Board does not anticipate that the Fed will cut interest rates by more than 25 basis points as inflation is moving in the right direction, the labor market is roughly balanced between supply and demand, and data suggest the US likely is currently not in a recession.
"We reiterate that interest rate cuts exceeding 25 basis points would signal material concern about the economy that might spook both Wall Street and Main Street," she added.