Sep. 14, 2012 at 8:45 AM ET
Retail sales rose for a second straight month in August, boosted by automobiles and high gasoline prices, but the underlying tone pointed to modest economic growth in the third quarter.
Retail sales increased 0.9 percent, the largest increase since February, the Commerce Department said on Friday, after a downwardly revised 0.6 percent rise in July that was previously reported as a 0.8 percent advance.
While the gain last month was above economists' expectations for a 0.7 percent rise, details of the report pointed to an only modest increase in consumer spending this quarter after sluggish demand restricted the economy to a 1.7 percent annual growth pace in the April-June period.
That suggests third-quarter economic growth would still be insufficient to cut into high unemployment, which on Thursday prompted the Federal Reserve to launch a third round of bond purchases and push its pledge to hold interest rates near zero through at least mid-2015 from late 2014.
The rise in sales last month was led by gasoline stations, reflecting a 28 cents per gallon increase in the pump price. Gasoline sales surged 5.5 percent, the largest increase since November 2009, after rising 0.4 percent in July.
Automobile sales increased 1.3 percent, the most since February, after gaining 0.1 percent in July.
Excluding gasoline and autos, retail sales edged up 0.1 percent after rising 0.8 percent the prior month.
Away from gasoline and autos, sales were mixed, with receipts at building materials and garden equipment suppliers rising 1.0 percent after increasing 1.2 percent in July. There were gains in furniture sales and sales at restaurants and bars
But there were declines in sales at clothing stores and at electronics and appliances shops. Receipts at sporting goods, hobby, book and music stores were flat.
So-called core retail sales, which exclude autos, gasoline and building materials, dipped 0.1 percent after increasing 0.8 percent in July.
Core sales correspond most closely with the consumer spending component of the government's gross domestic product report.
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