U.S. retail sales rise in August for third month in a row

ales at retail stores across the country rose in August for the third month in a row and topped precrisis levels again, a remarkable turnaround for an industry hurt badly in the early stages of the coronavonirus outbreak whose rebound reflects the resiliency of the U.S. economy.

Retail sales increased 0.6% last month, the government said Thursday, a tick below the forecast of economists polled by MarketWatch.

The pace of sales has slowed, however, from earlier in the summer, when the economy reopened and many retailers experienced a sharp rebound in customer traffic. Sales gains are likely to be harder to come by in the months ahead, especially after the end of generous federal aid for the unemployed and businesses struggling to survive.

Retail sales are a big part of consumer spending and typically increase when the economy improves and Americans feel more confident to spend. Sales have exceeded precrisis levels since June, reflecting a rapid rebound that few economists would have predicted early in the pandemic.

Sales rose 0.2% at auto dealers, which account for about one-fifth of all retail spending.

Gas station receipts also increased 0.4%, largely reflecting an increase in the cost of gasoline. Yet it still costs a lot less to fill than it did last summer because of weaker demand for oil and gas. People aren’t driving as much because of ongoing economic restrictions and tens of millions of people working from home.

If autos and gas are excluded, retail sales rose a slightly higher 0.7%.

Sales rose 4.7% at bars and restaurants as people went out to eat more or ordered more takeout. Higher spending at restaurants even in the face of ongoing limits on indoor seating is a good sign. People tend to spend less at restaurants when they are more worried about the economy.

Sales rose more modestly at home centers, pharmacies, electronic and appliance stores and clothing outlets.

Internet retailers saw basically no change in sales levels, though receipts are up 22% from a year earlier. Online sales have soared during the pandemic with most people working at home and limiting their trips out of the house.

Sales fell last month at department stores and groceries. Grocery sales are still up a whopping 9% from a year earlier, however.