Retail Sales Rose in August, Highlighting Uneven Consumer Spending

Retail sales increased slightly in August, the Commerce Department reported Thursday, highlighting an uneven pace for the economic recovery as spending behavior swings month over month.

The 0.7 percent climb in sales last month came after a 1.8 percent decline in July and gains earlier in the summer. The gains in August, which were better than what economists expected, were prompted by a rise in spending on clothing, electronics, and furniture and home goods.

Sales at bars and restaurants fell, after a rise in July.

That drop is “partly tied to the end of summer, but it’s also tied to fear of the virus when going into a bar,” said Beth Ann Bovino, the U.S. chief economist at S&P Global.

Sales of sporting goods and musical instruments and at book stores rose as students prepared to go back to school. Sales at nonstore retailers, which include e-commerce businesses, rose about 6 percent in August after falling in July.

“The resurgence of the virus resulted in households switching their buying options to hands-free transactions,” Ms. Bovino said.

Sales of cars and auto parts were down 4.5 percent in August. The auto industry has been hit by a shortage of computer chips, causing Toyota Motor to announce recently plans to slash production by about 40 percent.

Prices of consumer goods continued to climb in August, albeit at a slower pace, according to data from the Labor Department released this week. The Consumer Price Index rose 5.3 percent in August from a year earlier, the data showed, suggesting inflationary pressures were starting to ease.

The University of Michigan will publish its monthly consumer sentiment index on Friday, a key indicator regarding the economic recovery and consumer behavior. The index fell more than 13 percent in July because consumers expected price increases to continue.

With more employers announcing mandates, the pace of coronavirus vaccinations had been trending steadily upward through the Labor Day holiday, giving economists reason for optimism if cases and hospitalizations level off or decline in September.

Analysts at Bank of America said on Thursday that spending for clothing increased 27 percent for the week ending Sept. 11 compared with the same period last year, based on credit and debit card data. The analysis also found that sales at department stores rose by 21 percent, while spending on furniture were up 9 percent compared with the same time last year.

“Households are sitting on a lot of cash,” Ms. Bovino said. “We expect to see a robust holiday spending season.”