Retail sales August 2022:

Retail sales figures were better than expected in August as price increases across a host of sectors offset a sizable decline in gas station revenue, the Census Bureau reported Thursday.

Advance retail sales of the month rose 0.3% from July, better than the Dow Jones estimate for no change. The total is not adjusted for inflation, which rose 0.1% in August, suggesting that spending exceeded price increases.

Inflation according to consumer price index rose 8.3% in the past year to August, while retail sales rose 9.3%.

However, excluding autos, sales fell 0.3% for the month, below the estimate of a 0.1% increase. Excluding automobiles and gas, sales rose 0.3%.

Sales at motor vehicle and parts dealers led all categories, rising 2.8%, helping to offset a 4.2% decline at gasoline stations, whose revenues fell due to the sharp drop in prices. Online sales also fell 0.7%, while bar and restaurant sales increased 1.1%.

Revisions to the July figures indicated further consumer struggles, with originally reported numbers unchanged but down 0.4%.

Also, the “control” group that economists use to summarize retail sales remained unchanged from July. The group excludes sales from car dealerships, building material retailers, gas stations, office supply stores, mobile homes and tobacco shops and that’s what the government uses to calculate the share of the Retail GDP.

“Rising inflation has boosted sales, but obviously volumes are down because, on a real basis, sales are negative,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “With core retail sales well below expectations, this will translate into lower third-quarter GDP estimates, as noted.”

Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the release “a mixed report, but we see no reason for alarm.” He said the housing crisis will cause some related sales numbers to decline, but overall spending is expected to rise as real incomes rise.

Retail trade numbers led a busy day for economic data.

Somewhere else, Initial jobless claims for the week ended September 10 totaled 213,000, a decrease of 5,000 from the previous week and better than the estimate of 225,000. Import prices in August fell 1%, less than the expected decline of 1.2%.

Two manufacturing gauges showed mixed results: The New York Federal Reserve Empire State Manufacturing Index for September showed a reading of -1.5, a massive jump of 30 points from the previous month. However, the Philadelphia Fed Gauge came in at -9.9, a sharp drop from 6.2 in August and below the expectation for a positive reading of 2.3.

Both Fed readings reflect the percentage of companies reporting an expansion versus a contraction, suggesting that the manufacturing sector declined overall during the month.

However, reports indicated some easing of price pressures. For New York, the prices paid and prices received indices fell 15.9 and 9.1 points respectively, although both remained solidly in growth territory with readings of 39.6 and 23.6. In Philadelphia, prices paid fell by almost 14 points but prices received increased by 6.3 points. These indexes were 29.8 and 29.6 respectively, indicating that prices continue to rise overall, but at a slower pace.

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