Advance retail sales for the month rose 0.3% from July, better than the Dow Jones estimate of no change. The total is not adjusted for inflation, which rose 0.1 percent in August, suggesting that spending outstripped price increases. Inflation, as measured by the consumer price index, rose 8.3% in the year to August, while retail sales rose 9.3%. However, excluding cars, sales fell 0.3% for the month, below estimates for a 0.1% rise. Excluding autos and gas, sales rose 0.3 percent. Sales at auto and parts dealers led all categories, rising 2.8 percent, helping to offset a 4.2 percent decline at service stations, whose receipts fell as prices fell sharply. Online sales also fell 0.7%, while bar and restaurant sales rose 1.1%. Revisions to July’s figures showed further consumer struggles, with the initial figures unchanged but down 0.4%. Also, the “control” group that economists use to discount retail sales was unchanged from July. The group excludes sales from car dealers, building materials retailers, petrol stations, stationery stores, caravan and tobacco shops and is what the government uses to calculate the retail share of GDP. “Higher inflation drove top selling, but volumes are obviously falling because on a real basis, sales are negative,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Core retail sales well below expectations will result in a cut in Q3 GDP estimates, as reported.” Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the release “a mixed report, but we see no cause for concern.” He said the decline in housing will dampen some relative sales numbers, but overall spending should rise as real incomes rise. Retail numbers led to a busy day for economic data. Elsewhere, initial jobless claims for the week ended Sept. 10 totaled 213,000, down 5,000 from the previous week and better than the estimate of 225,000. August import prices fell 1%, less than an expected 1.2% drop. Two manufacturing gauges showed mixed results: The New York Federal Reserve’s Empire State Manufacturing Index for September showed a reading of -1.5, a huge 30-point jump from the previous month. However, the Philadelphia Fed index came in at -9.9, a big drop from 6.2 in August and below expectations for a positive reading of 2.3. The two Fed readings reflected the percentage of firms that reported expansion versus contraction, suggesting that manufacturing was broadly in a tailspin for the month. Reports, however, indicated some easing of price pressures. For New York, the price paid and price received indexes respectively fell by 15.9 and 9.1 points, though both remained firmly in growth territory with readings of 39.6 and 23.6 points. In Philadelphia, prices paid fell nearly 14 points, but prices received rose 6.3 points. These indicators were 29.8 and 29.6 respectively, indicating that prices are still rising overall but at a slower pace.
