According to Reuters, U.S. retail sales took an unexpected turn as they fell in August. Analysts argue that Hurricane Harvey affected motor vehicle purchases that labeled consumer spending as moderate at best in the third quarter. Economists at Reuters had predicted retail sales rising by 0.1 percent. The Commerce Department reported a retail sales drop of 0.2 percent last month.
The Commerce Department claimed that it could not isolate the effects of Hurricane Harvey on retail sales but that companies impacted by the hurricane had “both positive and negative effects on their sales data while others indicated they were not impacted at all.”
Although the weak sales report was unexpected, it’s doubtful that the Federal Reserve will shrink its $4.2 trillion portfolio of Treasury bonds and securities at its policy Meeting Sept 19-20.
Service Stations reported a 2.5 increase in August which reflected higher gasoline prices. Department store retailers began to struggle as increased competition from Amazon, Inc. (NASDAQ: AMZN) and other online retailers increase.