Retail sales jumped higher in August than in the previous five months while business inventories saw their biggest rise in two years and business sales also rose after tumbling downward for two months, the U.S. Commerce Department reported Tuesday.
U.S. retail and food services sales for August were $363.7 billion, an increase of 0.4% from July and 3.6% above August 2009, the Commerce Department reported. Economists’ consensus was for a 0.3% rise. Sales excluding cars, gas and building materials increased 0.6%, two times higher than consensus.
The markets were all modestly higher in midday trading Tuesday, with the Dow Jones industrial average up 25 points to 10,569.
“August retail sales data confirm the pattern in evidence throughout the year–consumers buying when necessary, just not as a leisure time activity. Consumers bought around Easter and now for back-to-school,” said Steve Blitz, senior economist with New York-based Majestic Research, in an analyst note.
In a sign of the weak housing market, sales of appliances and furniture fell, Blitz noted, adding that a pattern of flat sales will likely continue into the holiday season.
“Tales of a double-dip [recession] are overdone, but so too are any notions that today’s report signifies that the consumer is back, ready to lead the recovery from here. The reality of a deleveraging low-growth economy is long periods of flat sales interrupted by bouts of seasonal buying,” he said.