Americans modestly increased retail spending from July to August along with rising fuel prices, causing a budget squeeze for many families as their children return to school.
Retail sales rose 0.6% in August, compared to an updated 0.5% increase in July, according to a report released by the Commerce Department on Thursday.
A closely watched category of retail sales that excludes auto dealers, gas stations and building materials and influences gross domestic product rose just 0.1% last month compared to the previous month, after a corrected an increase of 0.7% in July.
A sharp rise in fuel prices accounted for more than half of the increase in inflation recorded in August, the Labor Department reported on Wednesday. Rising fuel prices are weighing on the economy and could slow consumer momentum heading into the crucial holiday shopping season.
In fact, US wholesale prices – which measure inflation before it reaches consumers – accelerated in August, mostly due to higher gasoline prices, according to a report issued by the Department of Labor. . That’s a sign that inflation remains stubbornly persistent despite a series of sharp interest rate hikes by the Federal Reserve.
The national average price of a gallon of unleaded gasoline last week reached $3.86 through Thursday, 5 cents higher than last week, according to AAA.
Excluding gasoline sales, retail sales rose just 0.2% in August, according to the Commerce Department’s report.