Stock Market Today: Dow futures hold record highs as Fed rate cut looms
Retail sales rose a scant 0.1% in August after a much larger increase in the prior month, but a look under the hood shows consumer spending held up fairly well.
For starters, sales were above the forecast for a 0.2% decline. Weak auto sales in August, as it turned out, were not as much as a drag as expected.
August also suffered from tough seasonal adjustments.
The start of Labor Day weekend – a big spending event – began at the end of August. Yet the government’s adjustments try to factor out holiday boost.
Retail sales before seasonal adjustments were notably stronger. Sales rose 2.5% last month and were near a record high, though as noted, the August retail numbers benefited from some sales that normally would have taken place in September.
Another factor that could make sales look weaker than they really are has been a decline over the summer in the cost of many goods.
Good prices minus food and energy have fallen in the past three months and six of the last eight. Goods prices have dropped 1.9% in the past year as inflation eased.
The upshot: Americans aren’t spending like they were a few years ago, but they are still spending plenty of money. Enough to keep the economy growing.