Autos Give Boost To Retail Sales

In a report that in sum is favorable, a big lift for auto sales gave a boost to retail sales in August, which rose 0.4 percent but were unchanged excluding autos. Looking at a core reading, sales less autos and less gas (where sales fell sharply on a drop in pump prices) managed only a 0.1 percent rise. But for another important core reading, which is the control group that besides autos and gas also excludes food services and building materials, sales rose a respectable 0.3 percent in the month.

Autos led the components with a 1.8 percent August gain that lifts this year-on-year rate to very strong 6.8 percent sales growth. Sales at nonstore retailers jumped another 1.6 percent to further underscore retail's structural movement toward e-commerce. Year-on-year, nonstore sales are up a very sizable 16.0 percent. Building materials were also strong in the month, up 1.4 percent though this component has been soft this year. And soft in August were sales at food services which fell 1.2 percent. General merchandise was also soft at a monthly minus 0.3 percent.

Total sales were up 4.1 percent in August, an unspectacular but solid rate that speaks to the strength of the consumer and in turn the strength of the US jobs market. Consumer spending has been holding up the 2019 economy yet for the Federal Reserve, which looks to cut rates again next week, strength here isn't likely to offset concern over global growth and domestic manufacturing.