US Retail Sales Beat Forecasts in Sign of Solid Summer Spending

By Augusta Saraiva

09/16/2025 06:08:19 [BN]

Summary by Bloomberg AI

• US retail sales rose in August for a third month in a broad advance, with the value of retail purchases increasing 0.6% after a similar gain in July.
• Nine out of 13 categories posted increases, led by online retailers, clothing stores and sporting goods, likely reflecting back-to-school shopping.
• The retail sales report showed control-group sales climbed 0.7% in August, indicating a healthy third quarter, with consumer spending supporting two-thirds of US economic activity.

(Bloomberg) — US retail sales rose in August for a third month in a broad advance, rounding out a summer of resilient spending.

The value of retail purchases, not adjusted for inflation, increased 0.6% after a similar gain in July, Commerce Department data showed Tuesday. That beat all estimates in a Bloomberg survey of economists. Excluding cars, sales climbed 0.7%.

Nine out of 13 categories posted increases, led by online retailers, clothing stores and sporting goods, likely reflecting back-to-school shopping. Motor vehicle sales rose at a slower pace, even though some economists expected it to be a dragon the overall figure.

Tuesday’s report adds to evidence that consumers are still spending even as tariffs boost the cost of some goods, sentiment remains subdued and the labor market shows signs of faltering. Though wage growth has cooled, many workers’ pay gains continue to outpace inflation, and others, particularly the wealthy, are benefiting from a stock market rally.

Federal Reserve officials are closely tracking consumer spending — which supports two-thirds of US economic activity — as they decide the trajectory of interest rates. While they’re still assessing the impact President Donald Trump’s tariffs will ultimately have on prices, they’re widely expected to cut rates at the end of their two-day meeting Wednesday in an effort to shield the labor market from further deterioration.

Stock futures remained higher and Treasury yields fluctuated after the report.

The retail sales report showed so-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — climbed 0.7% in August, so far indicating a healthy third quarter. The measure excludes food services, auto dealers, building materials stores and gasoline stations.

The retail sales figures largely reflect purchases of goods, which comprise roughly a third of overall consumer outlays. Because the data are not adjusted for inflation, an advance could also reflect the impact of higher prices.

Consumer prices for several categories in the report, including apparel and cars, increased last month. A report on real spending on goods and services for August will be released later this month.

What Bloomberg Economics Says…

“We think pushback by consumers is deterring firms from passing on tariff costs, helping demand rebound after a dip following the ‘Liberation Day’ tariff announcement.”

— Eliza Winger.

Spending at restaurants and bars, the only service-sector category in the retail report, advanced 0.7% after declining in the prior month.

Inflation data out last week suggested companies largely refrained from price hikes last month, as many firms have been wary that steep markups could push customers away.