US retail sales rose 1.2% in August, outstripping economists’ forecasts of 0.7% to 0.8% and reversing July’s revised 0.5% fall. The Commerce Department figures, released Wednesday, September 16, point to continued household spending after the first monthly retail-sales decline in nine months.
The August increase was the largest since March 2026. Sales were also 6.0% higher than a year earlier. The figures are not adjusted for inflation, so they measure the value of sales rather than the volume of goods and services bought.
The recovery was broad. Twelve of the 13 major retail categories recorded month-on-month growth. Households increased purchases across a range of goods and spent more at restaurants and bars, suggesting the gain extended beyond a single volatile area of spending.
Gas station sales rose 3.1% in August, the strongest increase among the major categories. Non-store retailers gained 2.6%, while electronics and appliance stores grew 1.6%. Food services climbed 1.2%.
Building material and garden equipment stores were the sole major category to decline, with sales down 0.2%.
A closely watched measure of underlying demand also exceeded expectations. Retail sales excluding automobiles, gasoline, building materials and food services rose 1.4% in August, their largest gain since September 2024. This control group measure had been expected to increase 0.5%.
The control group is used in assessing the goods-consumption component of gross domestic product. Sales in that component jumped 1.4% month over month in August, its strongest single-month performance in nearly two years.
The report prompted economists to upgrade their gross domestic product growth estimates for the third quarter. Economists surveyed by Reuters and Bloomberg had expected overall retail sales growth of 0.7% to 0.8% before the release.
July’s revised 0.5% decline had interrupted nine months without a monthly fall in retail sales. August’s result restores the picture of consumers continuing to spend, though the data do not show how much of the year-on-year 6.0% increase came from higher prices and how much reflected greater volumes of purchases.
The figures also leave open whether the August rebound will continue into September and beyond. They do, however, show that spending on goods and food services strengthened during August, providing a firmer basis for economists’ higher third-quarter growth estimates.
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