August Retail Sales Growth Accelerates Amid Gains Across Most Categories

10:23 AM EDT, 09/16/2025 (MT Newswires) -- Retail sales growth accelerated last month amid broad-based gains, including in spending on motor vehicles and at fuel stations, the US Census Bureau said Tuesday.

Sales rose 0.6% sequentially in August, compared with the Bloomberg-compiled consensus calling for a slowdown in growth to 0.2%. The pace of increase in July was revised upward to 0.6%.

On an annual basis, retail sales climbed 5%, marking an acceleration from a 4.1% jump in July.

"The retail sales figures suggest aggregate spending is now back on track following a weak (first half), but we think much of that strength has been concentrated among higher income households, who are responsible for most spending," Oxford Economics Deputy Chief US Economist Michael Pearce said in remarks emailed to MT Newswires. "Spending among low-income consumers is still under pressure from a weakening labor market, and a policy mix that is weighing on real disposable incomes."

Last week, the Department of Labor reported that weekly applications for unemployment insurance reached a nearly four-year high. Earlier in September, the Bureau of Labor Statistics reported that nonfarm payrolls rose less than expected in August, while the government agency revised down its jobs growth by 911,000 for the year through March.

Spending on motor vehicles and parts and at gas stations rose 0.5% each last month, according to the report. Building materials and garden equipment, as well as food services and drinking places turned positive.

Outlays at furniture, personal care and department stores were all down.

Retail sales without the motor vehicle and gas components were up 0.7% last month, compared with Wall Street's views for a 0.4% increase, the Census Bureau reported.

"With tariff pass-through slower than expected, the (Federal Reserve) on the verge of resuming rate cuts, and the impact of tax cuts likely to build over coming quarters, the outlook for consumer spending is brightening," according to Pearce.

Markets are widely expecting the Federal Open Market Committee to lower its benchmark lending rate by 25 basis points, according to the CME FedWatch tool.

Last week, government data showed that consumer inflation in the US accelerated at the fastest pace in seven months in August, while the annual core rate remained above 3%.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.