Retail sales, which account for about one-third of gross domestic product, have weakened further in August, as the effect of the tax rebate checks has worn off completely. Retail sales dropped 0.3% in August, well below expectations. Excluding a surprising 1.9% gain in automobile purchases, sales fell further, down 0.7%. Excluding gas purchases, and that number becomes the highlight of the report, as sales were flat. Economists were expecting a 0.4% increase in total sales and a 0.2% loss ex-auto.
In the past year, retail sales are up 1.6%. Excluding gasoline, sales are down 0.7%. The figures are not adjusted for price changes.
Most categories of stores reported sales declines in August. The main areas of strength were autos and food.
Outside of autos, spending on durable goods was weak.
Sales at electronics stores dropped 1.3% and sales at building materials and garden stores dropped 2.2%. Sales at furniture stores were unchanged.
Sales at food and beverage stores rose 0.7%. Sales at restaurants and bars rose 0.2%.
Sales at general merchandise stores fell 0.2%, including a 1.5% drop at department stores. Sales at clothing outlets fell 0.3%.
Sales at health and personal-care stores rose 0.2%. Sales rose 0.5% at stores catering to leisure-time pursuits such as music, reading or sports.
Sales at nonstore retailers fell 2.3%, possibly the consequence of lower gas prices as consumers drove to shop rather than ordering through catalogs or on line.
See Full Report.