August Retail Activity Drops

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • August retail sales – measured by prices – DECLINED $989 million or 0.2 percent from July, despite a $900 million increase in gas station sales;
  • Without gasoline station sales, August retail sales FELL $1.9 billion, or 0.4 percent from July;
  • July retail activity, initially reported as up 0.6 percent from June, was revised downward to show a 0.3 percent increase
  • Excluding auto sales, which fell $1.575 billion, retail sales increased $586 million or 0.2 percent from July;
  • Year-year total sales ROSE 3.4 percent in August compared with a 3.5 percent year-year boost in July.

Image result for retail salesWith gasoline station operators boosting prices perhaps in anticipation of Hurricanes to come, gasoline prices rose sharply in August leaving consumers with little room in their wallets to take advantage of other shopping outlets, the Census Bureau reported Friday.

The monthly report set the stage for another round of price shocks when sales are reported for September.

The Census report was consistent with the Bureau of Labor Statistics Consumer Price report Thursday which showed gasoline prices up 6.3 percent in the month. The CPI survey is conducted in the first three weeks of the month which means it was unaffected by Hurricane Harvey which put major refineries offline in Houston and Louisiana.

Image result for gasoline stations

Though billed as a retail sales report, the Census release notes sales are not adjusted for inflation which makes it more a reflection of merchant than consumer activity. attitudes than consumer activity. As an example, gasoline “sales” rose 2.5 percent in August, the same month in which the per gallon pump price went up nearly 3.5 percent.

Prices, as interpreted from the Census report, were up at restaurants, food and beverage stores, health and personal care stores and sporting goods stores, each of which saw sales increase in August. According to the report, sales/prices at non-store retailers, essentially online stores, fell $573 million in August. Sales at clothing stores were off $211 million as shoppers took advantage of back-to-school sales,

The bump in restaurant sales/prices came in the same month in which restaurants increased staffing by 9,200, well below the 23,600 average monthly increase in restaurant jobs over the past year.

Hear Mark Lieberman on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, every Friday at 6:20 am Eastern Time. You can follow him on Twitter at @foxeconomics.

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