Retail sales in the US surged past analyst expectations in August, government data showed today, as energy prices remained elevated amid war with Iran.
US retail sales climbed 1.2% month-on-month to $773.9 billion, reversing a 0.5% decline in July, according to an advance estimate by the Department of Commerce.
Sales at gasoline stations were up 3.1% from the previous month, and were 21% higher than the same time a year ago.
The estimates are adjusted for seasonal variation but not price changes, and gasoline costs have surged since US-Israeli strikes targeting Iran in late February prompted Tehran to choke off the Strait of Hormuz.
The waterway is an important route for global energy transit.
Economists had expected a lower 0.8% uptick in retail sales, according to a forecast published by MarketWatch.
But “American consumers keep spending despite high prices and a lot of uncertainty,” said Navy Federal Credit Union chief economist Heather Long.
Although spending at gasoline stations jumped as energy costs increased, other retailers did well too, Long said.
“Online retailers such as Amazon continue to be some of the biggest beneficiaries as prices rise and people look for deals,” Long said in a note.
But she warned that a consumer spending slowdown “is likely later this year and into early 2027” as households are forced to cut back with real incomes flat or declining.
Higher costs of living are also weighing on voters just weeks before US midterm elections in November.
For the first time ever, the national average in August remained above $4 per gallon every day as of August 27, making it the most expensive August at the pump, according to the AAA motorists’ association.
Excluding sales at gasoline stations, retail sales were up 1.1% in August from the previous month. Sales also rose at restaurants and bars, by 1.2%.
