Retail sales unexpectedly increased last month despite continued challenges facing the economy as it recovers from the coronavirus pandemic.
Sales ticked up 0.7% in August relative to July and totaled $618.7 billion, according to a Census Bureau report published Thursday. E-commerce, furniture, general merchandise, building materials and energy purchases drove last month’s sales increase.
Dow Jones economists had expected sales to decline 0.8%, CNBC reported. In July retail sales posted a sharp 1.8% decline as coronavirus cases surged, the Census report said Thursday.
“We really got a head fake and this happens a lot. A couple of weeks ago it looked very disappointing,” National Securities Corporation Chief Market Strategist Art Hogan told Yahoo Finance. “It’s a classic example of consumers actually saying one thing and doing something else.”
While the overall sales figure increased, the volatile automobile category saw a significant decline of 3.6%, according to the Census Bureau. Excluding car sales, total retail sales increased 1.8% in August compared to July.
Non-store retail sales, which mainly include online shopping, increased 5.3% month-over-month, the largest uptick of any category. E-commerce prices, though, have skyrocketed over the last year as a result of economy-wide inflationary pressures.
In addition, furniture sales increased 3.7%, general merchandise store sales rose 3.5%, food sales increased 1.8%, building materials sales grew 0.9% and gasoline sales ticked up 0.2%. Electronics and sporting goods sales declined by 3.1% and 2.7% respectively.
Inflation, meanwhile, has continued to rise to new multi-decade highs. Consumer prices rose an annual rate of 5.3% in August compared to their pre-pandemic average increase of 2.5%.
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