Economic Report: Retail sales rebound, but they aren’t adding much oomph to the U.S. economy

by | Sep 15, 2022 | Stock Market

The numbers: Sales at U.S. retailers rose a mild 0.3% in August as Americans spent more on new cars and trucks and went out to eat more, suggesting the economy grew at at a steady if slow pace toward the end of the summer. Retail sales are a big part of consumer spending and offer clues on the strength of the economy.

The amount of money Americans are spending is still quite high, but it largely reflects the higher prices they are paying because of soaring inflation. Adjusted for inflation, retail spending has basically been flat for the past year. Retail sales were forecast to be unchanged in August, according to economists polled by The Wall Street Journal. Yet the modest increase in sales didn’t look as good in light of government revisions showing that receipts actually fell 0.4% in July instead of being flat as first reported. The decline in sales in July was the first in seven months. Big picture: Retailers are basically treading water. They are selling roughly the same amount of goods and services as they were a year earlier after inflation is factored in. The U.S. economy as a whole is faring somewhat better, with growth forecast to accelerate in the third quarter running from July through September. Yet the economy faces a potential rough patch — perhaps even a recession — as the calendar turns toward 2023, w …

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