US consumer expenses increased in August as gas prices tumbled

August saw a further month of declining gas costs, which helped Americans' wallets a little. Last month, this brought customers back into stores. Following a corrected 0.4% decline in July, the Census Bureau said on Thursday that a key indicator of US retail sales increased unexpectedly by 0.3% on a monthly basis in August. Retail sales increased by 9.1% from a year ago despite not accounting for inflation. A 4.2% decrease in gas station spending for the month was indicative of the ongoing decline in petrol prices. Sales increased by 0.8% for the month after adjusting for this volatile component. Monthly grocery store spending increased by 0.2% as a result of persistently high food inflation.

Higher rates hitting some retail categories

Eight of the 13 retail spending categories the Census Bureau tracks saw growth in August. The amount spent at food and beverage merchants increased by 0.5% in the month and by 7.2% in the previous year. Restaurant and bar sales climbed, while sales at vehicle dealerships increased 2.8% month over month. Spending increased on apparel, athletic products, and equipment and materials for construction. Clothing and department stores "may have been able to keep a lot of back-to-school shoppers spending in-store," said Doug Hermanson, principal economist at Kantar. "Gasoline prices have been down the past couple of months... From a parent's perspective, it freed up a little bit of cash they didn't think they were going to have in May or June." Gas stations, furniture stores, electronics stores, health and beauty supply stores, and non-store retailers all saw a decline in spending in August. Market watchers hypothesized that non-store sales, a loose proxy for e-commerce, decreased in August as a result of the timing of Amazon Prime Day in July. "Consumer electronics and furniture are pulling back. Those are the channels showing the weight of the housing market... continuing to hit those sectors," Hermanson said. Freddie Mac data found that mortgage rates rose above the 6% mark for the week ending Thursday, the highest level since fall 2008 and more than double the rate from a year ago.