US retail sales increased in August due to higher gas prices and higher car and truck sales.
According to the Commerce Department, retail sales rose a seasonally adjusted 0.9%, gas station sales increased 5.5%, the highest in three years, and auto sales was up 1.7%. Besides these categories, overall sales increased 0.1%, lower than 0.8% in July.
“This has to go down as a weak report,” said Paul Dales, senior U.S. economist at Capital Economics. “Most of the spending in August was on products that households have to buy, such as gasoline, not items they like to buy, such as new TVs.”
As consumer spending, which accounts for 70% of the economic activity, has increased at a slow pace, kept business from hiring and dragged on the economy. In August consumer prices increased 0.6% and gas prices were up 9%, accounting for 90% of the increase. Automakers reported for August the best sales in the past three years, mainly due to rising demand for the pickup trucks.
In August 96,000 new jobs were added, under the 141,000 added in July and far below the 226,000 in the first three months of this year. Still, the unemployment rate fell from 8.3% to 8.1%, only because the number of people in the work force shrank.