Retail sales slowed in August, with clothing sales experiencing the biggest drop.
Sales in the retail sector eked out an increase of just 0.1% last month over the July sales rate. That performance followed months of strong consumer spending at retail.
Core retail sales were up 6.2% compared to the same period last year.
Clothing stores suffered a 1.7% decline in sales compared to July, the worst performance of any category. Sales in that category still bested the August 2017 numbers by 6.3%.
Department stores saw a 1 percent drop in sales, while sales in the car sector fell by 0.8%.
Only miscellaneous stores at 2.3% and gasoline at 1.7% saw sizable gains over July. And gas sales were up 20.3% over August 2017.
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Non-store retailers, which is primarily comprised of e-commerce businesses, increased by 0.7% over July and 10.4% compared to the prior-year period. These retailers reported sales 10.4% hire than the previous August.
Despite the overall slowdown, analysts say the strong economic fundamentals indicate the outlook for the sector is still positive.
“Retail sales remain strong thanks to a solid labor market, accelerating wage growth and consumer optimism, which helps to power the consumer spending gains we are seeing,” NRF chief economist Jack Kleinhenz said. “Clearly, household spending is resilient and a contributor to third-quarter GDP growth, however, uncertainty over tariffs is creating anxiety and could fuel material changes in consumer spending.”
Though analysts polled by Reuters had expected retail sales to be up by 0.4% in August, the market isn’t rattled by the slower-than-expected growth.
“Consumer spending will continue to increase at a sturdy pace through the rest of this year and into 2019, supporting overall economic growth,” Gus Faucher, chief economist at PNC Financial, told the publication.
Retail sales data for July was adjusted up to 0.7% over the previously reported 0.5%.
