US retail sales resilient as online shopping rebounds
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The news: US retail sales unexpectedly rose by 0.1% in August, driven by a rebound in online purchases that offset declines in other sectors such as autos, electronics and clothing.
The numbers: Sales had been forecast to fall 0.2%. Core retail sales, excluding volatile categories like autos and gas, increased by 0.3%, the fourth straight month of gains.
Five out of 13 categories, including electronics and furniture, posted declines. In July, retail was upwardly revised to a 1.1% gain.
The context: The stronger-than-expected retail data amid a tight labour market suggests continued resilience in consumer spending even with high interest rates.
Economists expect the Federal Reserve will cut interest rates by at least 25 basis points this week, but traders are still split about the magnitude, with some betting a 50 basis point cut is possible.
What they said: "There does not appear to be any reason for Fed officials to start out with a larger 50 basis points rate cut because whatever stress there is in the labor market, it isn't translating into weaker economic demand," Economist Christopher Rupkey from FWDBONDS told Reuters.
"If this is an economy on the brink of recession, consumers certainly don't see it."
The sources: US Census Bureau , Reuters
