Overview
- The Commerce Department reported Wednesday that retail and food services sales rose 1.2% in August and the key 'control group' used to measure consumer spending in GDP climbed 1.4%.
- Import prices also rebounded, the Labor Department said, rising 0.7% in August and 7.0% from a year earlier which signals fresh inflationary input pressures for U.S. businesses.
- Gains were concentrated in gasoline stations, nonstore and online retailers, electronics, restaurants and vehicle dealers while building materials lagged, reflecting a shift toward discretionary and online purchases.
- Economists said the stronger-than-expected control‑group reading lifts Q3 GDP estimates and makes further Federal Reserve rate increases more likely as policy makers weigh persistent price pressures.
- August’s rebound followed a revised 0.5% drop in July that analysts attribute partly to timing of promotions such as Amazon Prime Day and seasonal buying, and the August figures are nominal so some growth reflects higher prices rather than larger volumes.