Ahead of the Bell: US retail sales

US retail sales likely increased in August, largely driven by higher auto sales

Associated Press
US retail sales rise in August on auto sales
.

View photo

In this Tuesday, Aug. 19, 2014 photo, a woman passes an active wear display at a J.C. Penney store, in New York. The Commerce Department releases retail sales data for August on Friday, Sept. 12, 2014. (AP Photo/Richard Drew)

WASHINGTON (AP) -- The Commerce Department releases retail sales data for August. The report will come out Friday at 8:30 a.m. Eastern.

SALES RISING: Economists forecast that retail sales rose 0.5 percent last month, according to a survey by the data firm FactSet.

Sales were flat from June to July. Growth in consumer spending has been modest in recent months, as solid job gains this year have not translated into meaningfully higher wages.

AUTO PILOT: Car sales are an exception. A stunning 1.58 million motor vehicles were sold last month, giving the auto industry its best August in 11 years, according to Ward's Automotive. That represented a 5.4 percent increase in auto buying over the past 12 months.

Chrysler sales soared 20 percent, while Nissan jumped nearly 12 percent. Total sales last month ran at an annual rate of 17.5 million, the highest since January of 2006.

The splurge at auto dealerships should help boost August retail sales, despite mixed signals elsewhere.

The University of Michigan said its index of consumer sentiment rose to 82.5 in August from 81.8 in July. But much of that increase was due to greater optimism about jobs, rising incomes, and increasing wealth among higher-income groups.

The pace of hiring slipped in August after several months of strong gains.

Employers added just 142,000 jobs last month, well below the 212,000 average of the previous 12 months. The unemployment rate fell to 6.1 percent, from 6.2 percent. But that was because more people without jobs stopped looking for one and were no longer counted as unemployed.

The largest drop in hiring last month occurred in retail, which shed 8,400 jobs after gaining 21,000 in July.

Wage gains have been sluggish since the recession ended in 2009 and that's led many people to be more cautious about spending money. Average hourly pay rose 6 cents to $24.53 in August. That's only 2.1 percent higher than a year ago and barely ahead of the overall 2 percent inflation rate.

View Comments (64)