U.S. Retail Sales Unexpectedly Rose in August

Source: U.S. Department of Commerce.

U.S. retail sales unexpectedly rose in August, likely bolstered by back-to-school shopping and child tax credit payments from the government, which could hamper expectations for sharp decline in economic growth in the third quarter. DXY up +0.51%, EUR USD down -0.53%

• Retail sales increased by 0.7% last month. July data was revised downwards to show retail sales declining 1.8% rather than 1.1% initially reported.
• Retail sales rebounded despite an ongoing global shortage of microchips, which is pushing automakers to cut production, leading to a scarcity of inventory at the showrooms.
• The semiconductor shortage, worsened by the recent wave of infections attributable to the Delta variant of the coronavirus, is also causing massive shortages of some electronic goods.
• US retail sales have remained even as spending is shifting back from goods to services such as travel and entertainment, though rising COVID-19 infections are causing delays in services spending.
• These so-called core retail sales align most closely with the consumer spending component of gross domestic product. They were previously estimated to have fallen 1.0% in July.