US retail sales unexpectedly rose last month — a surprisingly strong result that likely lowers the odds for a large rate cut this week from the Federal Reserve.
Data released on Tuesday by the Commerce Department showed that the value of retail purchases rose 0.1% in August — surpassing economists’ forecasts for a 0.2% drop — as cash-strapped consumers showed resilience in the face of a wobbly economy.
Last month’s surprise increase came after a revised 1.1% gain in July, Commerce Department data showed Tuesday. Excluding autos and gasoline stations, sales rose for the fourth straight month.
Five of the13 major sales categories tracked by the report posted increases, while others including electronics and appliances, clothing and furniture fell. Falling prices at the pump fueled a drop in sales at gasoline service stations.
The better-than-expected numbers — which reflect solid household demand even as hiring and wage growth have lately shown signs of leveling off — come as traders hope the Federal Reserve will issue highly-anticipated interest rate cuts after their policy meeting Wednesday.
