August retail sales grew but new tariffs present ‘downside risks’

by Stephen Garner
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Retail sales were up 0.4 percent in August seasonally adjusted from July and up 4.6 percent unadjusted year-over-year, the National Retail Federation (NRF) said on Friday. The numbers exclude automobile dealers, gasoline stations, and restaurants.

As of August, the three-month moving average was up 4.1 percent over the same period a year ago, compared with 3.5 percent in July. August’s results build on gains of 0.9 percent month-over-month and 5.5 percent year-over-year in July.

Online and other non-store sales were up 14.3 percent year-over-year and up 1.6 percent month-over-month seasonally adjusted, while clothing and clothing accessory stores were up 2.3 percent year-over-year but down 0.9 percent month-over-month seasonally adjusted.

These results come as new 15 percent tariffs on a wide range of consumer goods from China took effect September 1st and are scheduled to be expanded to additional goods on December 15th, covering a total of about $300 billion in imports. In addition, 25 percent tariffs already in effect on $250 billion worth of imports are set to increase to 30 percent on October 15th.

“While consumer attitudes about the economy indicate some retreating optimism, the bottom line is that consumer spending remained resilient in August and continued to be a key contributor to U.S. economic growth,” said Jack Kleinhenz, chief economist at NRF. “Trends remain strong, but August grew somewhat slower than July, which could reflect consumers’ concerns about the unpredictability of trade policy. It is too early to assess the impact of the new tariffs that took effect at the beginning of this month, but they do present downside risks to household spending.”

NRF’s numbers are based on data from the U.S. Census Bureau, which said today that overall August sales – including auto dealers, gas stations and restaurants – were up 0.4 percent seasonally adjusted from July and up 4.1 percent unadjusted year-over-year.

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