Consumers may be griping about higher prices at the pump and elsewhere, but they keep spending, helping to power the economy, according to the latest government snapshot.
Retail sales rebounded at a better-than-expected 1.2% increase last month after recording a revised 0.5% dip in July, according to Commerce Department data released Wednesday.
Much of the strength in retail last month reflected a bounce back in nonstore sales, which declined sharply in July, according to economists. That was “seasonal noise” driven by shifts in the timing of Amazon’s Prime Day shopping event, which also coincides with heavy promotions from other major online retailers, according to Michael Pearce, chief U.S. economist at Oxford Economics. Rising gas prices also propped up gasoline station sales, he said.
But even accounting for these factors, gains in most spending categories were “decent,” led by discretionary sectors such as food services, electronics, and sports and recreation, Pearce wrote.
The so-called control group — which excludes food services, autos, building materials and gas station sales and is used to calculate economic growth — rose a strong 1.4% last month from the prior month.