Sales at retailers climbed in August at the fastest pace in four months and prior readings were revised up, boosting prospects for U.S. economic growth this quarter.
The 0.6% gain matched the median forecast of 82 economists surveyed by Bloomberg and followed a 0.3% increase the prior month that was stronger than previously reported, the Commerce Department reported.
Eleven of 13 major categories showed advances, led by auto dealers and building material stores.
More hiring, stock-market gains and cheaper prices at the gas pump put Americans in the mood to shop, providing a lift to the expansion that’s now in its sixth year. Faster wage growth would provide a bigger boost for consumer spending, which accounts for almost 70% of the economy.
“The momentum in sales is fairly positive,” Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, said. “Increases in confidence and employment argue for more gains in consumer spending.”
Estimates in the Bloomberg survey ranged from advances of 0.1% to 1.2%. July retail sales were previously reported as little changed from a month earlier. June was revised up to show a 0.4% increase from a previously reported 0.2% gain.
Sales climbed 1.5% at automobile dealers, the best showing since March, after a 0.6% increase the prior month.
Industry figures indicate Americans continue to spend on vehicles. Sales of cars and light trucks rose to a 17.5 million annualized rate in August, the highest since January 2006, from a 16.4 million pace a month earlier, according to data from Ward’s Automotive Group.
Retail sales excluding autos increased 0.3 % in August for a second month, today’s report showed. That matched the median forecast of economists surveyed by Bloomberg.
Spending increased 1.4 % at building-material stores, 0.7 % each at furniture and electronic merchants and 0.9 % at sporting goods outlets, today’s report showed.
Two categories showed weakness with sales declining at service stations and general merchandise chains, which include department stores. The Commerce Department’s retail sales data aren’t adjusted for prices, so the drop at gasoline stations may reflect lower costs at the pump.
Regular gasoline sold at an average $3.42 a gallon as of Sept. 10, the lowest in more than six months, according to AAA, the biggest U.S. motoring group. Lower fuel prices are freeing up money for consumers to spend elsewhere.
Another report showed a decline in the cost of oil helped push down prices of imported goods by 0.9%, the most since November, according to figures from the Labor Department. Compared with the same month last year, import prices fell 0.4%.
The 4.6% drop in the cost of imported fuel last month was the biggest since June 2012, the report showed.
The Commerce Department’s retail report showed sales excluding autos, gasoline and building materials, which render the figures used to calculate gross domestic product, climbed 0.4% in August for a second month. The July reading was revised up from the 0.1% previously estimated, which will probably prompt some economists to raise growth forecasts.