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First Cut: Retail sales boosted by motor vehicles in August

Retail and food sales were up 0.4% in August with modest upward revisions of a tenth to up 0.8% in July and up 0.4% in June. This shows the pace of consumer spending is still quite good at the mid-point of the third quarter. Sales were above expectations at the headline, but excluding motor vehicles may be a bit disappointing.

Compared to a year-ago, total retail and food sales were up 4.1%, and up 3.5% excluding motor vehicles.

Sales did get a solid boost from auto dealers at up 1.8%. Excluding motor vehicles, sales were flat. However, some of that was due to the 0.9% decline for gasoline sales related to a decrease in prices at the pump rather than necessarily in sales volume. Other retail sectors like nonstore retailers (up 1.6%) building materials (up 1.4%), sporting goods (up 0.9%), and health and personal care (up 0.7%) had a good month. Sales at clothing stores lagged (down 0.9%) as some shoppers were waiting for the school year to start before buying.

“Core” retail sales — sales excluding motor vehicles, building materials, and gasoline — were flat month-over-month in August, but up 4.5% compared to August 2018.

In spite of some concerns about an economic downturn, consumers still seem to be inclined to spend and are likely to contribute strongly to GDP growth for the third quarter.

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