Retail sales account for a large part of consumer spending, which itself is typically the largest segment of GDP in an advanced economy. Changes in retail sales have a large effect on GDP growth rates and thus they are of great interest to economists, policy makers and financial markets.
Apart from a weak January, US retail sales had been robust from September 2017 onwards when annual growth rates started exceeding 5%. The annual growth rate has trended up since the beginning of 2018 but the latest August figures have presented a pause as car sales contracted.
According to the latest “advance” sales numbers released by the US Census Bureau, total retail sales grew by just 0.1% over the month, which is less than the +0.6% expected and lower than July’s 0.7% increase after it was revised from 0.5%. On an annual basis, sales increased by 6.6%, which is slightly lower than July’s comparable figure of 6.7% after revisions.