:max_bytes(150000):strip_icc()/GettyImages-2234083289-844c9d3e22534457aaf7a21e9fa54f33.jpg "The Job Market is Dicey And Prices Are High, But Consumers Kept Spending in August")
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Key Takeaways
- U.S. retail sales grew by 0.6% in August, coming in better than economists expected given the labor market’s weakness and persistent inflation.
- The report also revised July data higher to show continued strength from the U.S. consumer.
- Sales of motor vehicles and electronics increased despite their exposure to U.S. tariffs.
Ignoring recent labor market weakness and persistent inflation, American consumers surprised economists by delivering better-than-expected retail sales results in August.
U.S. retail sales were up 0.6% in the Census Bureau’s report, while economists expected sales to slow in August.The report also showed that sales in July were better than first reported.
The positive sales report follows negative news out of the labor market, where job growth has slowed and unemployment has ticked higher. The results come as economists are watching for impacts from President Donald Trump’s tariff policies, especially as inflation has remained persistently high.
“It’s a weird macro environment right now,” wrote Bret Kenwell, an eToro U.S. investment analyst. “Inflation continues to edge higher, while labor market measures — like payrolls, unemployment, layoffs, and job openings — are moving in the wrong direction. Despite all this, consumers remain resilient and continue to spend.”
The data showed that some items subject to tariffs were still selling, including motor vehicles, electronics, appliances, clothing and sporting goods. Online sellers like Amazon recorded a big monthly gain of 2%.
“The spending was rather broad-based as consumers even spent generously on discretionary goods such as those related to hobbies and recreation and restaurants and bars,” wrote Nationwide Chief Economist Kathy Bostjancic.
