US retail sales, producer prices jump in August on rising energy costs
Sign up now: Get ST's newsletters delivered to your inbox
The reports, coupled with consumer inflation data, indicate that US households are feeling the impact from higher costs.
PHOTO: AFP
Follow topic:
NEW YORK – US retail sales and producer prices both rose in August by more than forecast on higher fuel costs, limiting other spending and suggesting prices are pinching consumers and businesses.
The value of total retail purchases increased 0.6 per cent from July following a downward revision to the prior month’s surge, Commerce Department data showed Thursday. Excluding petrol, sales climbed 0.2 per cent.
A separate government report showed that the producer price index (PPI) for final demand increased 0.7 per cent from a month earlier. The cost of petrol surged 20 per cent, accounting for much of the gain. Excluding food and energy, the PPI rose 0.2 per cent.
The reports, coupled with consumer inflation data on Wednesday
They also keep open the possibility that the Federal Reserve will raise interest rates again this year, following an anticipated decision next week to leave borrowing costs unchanged at a 22-year high.
Other data on Thursday showed that filings for unemployment insurance remained low last week, a sign that businesses remain reluctant to let go of workers.
The retail sales figures, which are not adjusted for inflation, showed that purchases rose in most retail categories last month, while the gains were more moderate in several areas.
While the figures still point to resilient spending, the report shows how consumers are coping with higher prices, particularly those at the gas pump.
Some Americans are relying on credit cards and savings, and a softening job market plus the imminent resumption of student-loan payments represent risks to spending going forward.
The PPI report showed that prices of goods jumped 2 per cent, though excluding energy and food, they were up 0.1 per cent. Services costs rose 0.2 per cent after a 0.5 per cent gain the prior month.
While normalising supply chains and a slowdown in many economies abroad have generally helped alleviate inflationary pressures at the wholesale level, rising oil prices threaten to unravel some of that progress. On an annual basis, the PPI accelerated for a second month following a year-long downward trend.
Other energy categories that increased last month included jet fuel, diesel and heating oil. Within services, residential real estate, truck transportation of freight and wholesaling of machinery and equipment also rose. BLOOMBERG
