Americans increased their spending at retail stores slightly last month, offering a modest economic boost as the Federal Reserve contemplates potential interest rate cuts. According to the Commerce Department on Tuesday, retail sales rose by 0.1% from July to August after experiencing the largest increase in a year and a half in the previous month. Online retailers, sporting goods stores, and home and garden stores all saw growth in their sales.
Despite facing three years of elevated inflation and higher interest rates, consumers continue to demonstrate their willingness and ability to spend more. The data suggests that average paychecks, especially for lower-income individuals, have increased significantly since the pandemic, enabling many consumers to sustain their spending habits even as essential goods become pricier.
During the ongoing presidential campaign, inflation and consumer well-being have been central topics, with former President Donald Trump attributing the post-pandemic surge in prices to the Biden-Harris administration. Conversely, Vice President Kamala Harris has countered Trump’s assertions by highlighting the potential negative implications of imposing 10% to 20% tariffs on all imports, referring to it as a “Trump tax” that could further escalate prices.
Online retailers experienced a 1.4% surge in sales, while health and personal care outlets saw a 0.7% increase. However, sales at restaurants and bars remained flat, indicating that consumers might be refraining from certain discretionary expenditures. Gas stations reported a 1.2% decline in sales, primarily due to a decrease in prices last month, and auto sales also saw a slight decrease.
