US Retail Sales Fell 0.3% in August | Financial Buzz

US Retail Sales Fell 0.3% in August

U.S retail sales declined more than expected in August as auto and gasoline purchases fell, a signal that slowdown in consumer spending growth may diminish expectations of rate hike next week.

The Commerce Department said on Thursday that sales at retail stores, online and at restaurants fell 0.3 percent in August, which marked the first decline in retail sales since March. Retail sales in July, which were previously reported to have been unchanged, were revised 0.1 percent gain.

Economists had expected overall retail sales would fall 0.1 percent and core sales climbing 0.3 percent last month.

“Consumption is slowing in the current quarter which should diminish hopes of an above 3% rebound in overall growth,” said RSM chief economist Joseph Brusuelas.

Consumer spending has been the primary driver of growth so far this year. The slowdown in retail sales raise concerns about if the economy will grow at a 3.3 percent annualized rate in the third quarter. The report also suggests the Fed will leave interest rates unchanged at its Sept. policy meeting. Fed Governor Lael Brainard said on Monday she wants to see stronger consumer spending data and signs of rising inflation before raising interest rates.

“Stronger income growth should put consumers in a position to be able to spend more,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “But budget-conscious households appear content to balance their spending habits with a greater commitment to their long-term financial health.”

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