August Retail Sales Weak; Consumer Outlook Steady

Sales at U.S. retailers rose a smaller-than-expected 0.3% in August and they recorded the biggest decline in almost a year when car sales were stripped out, a government report showed on Friday.

Paul Sakuma / AP

Meanwhile, consumer sentiment was steady in early September from August as shifts in outlooks among different income and age groups and regions offset each other, a survey showed.

Excluding motor vehicles and parts, retail sales fell 0.4% last month, the sharpest drop since September 2006, the Commerce Department said.

Analysts polled by Reuters were expecting sales to gain 0.4% and to rise 0.2% when cars and parts were stripped out.

Retail sales excluding cars, parts and gasoline, fell 0.1%, the steepest decline since April.

So-called core retail sales -- which exclude cars, gasoline and building materials -- were unchanged in August after a 0.8% gain in July.

Purchases of motor vehicles and parts, which make up around one-fifth of all sales, rose 2.8%, the biggest rise since July of last year.  Sales fell 2.4% at gas stations.

The August sales report showed declines from a range of other retailers. For example, clothing store sales slipped 0.1%, building materials and garden supply store sales fell 1.0%, and department store sales dropped 0.2%. Sales at food and beverage stores held steady in August.

The Reuters/University of Michigan Surveys of Consumers said its preliminary September figure on consumer sentiment was 83.8, slightly above a median forecast of 83.4 and the final August reading of 83.4.

Consumer sentiment has been seen as a proxy for future consumer spending, which accounts for two-thirds of the U.S. economy. This deterioration in consumer mood seemed to be reflected in recent weekly retail sales data.

The survey's gauge of current consumer conditions was 98.3 in early September, little changed from 98.4 in August.

The figure on consumer expectations for early September was 74.4, slightly above the final August reading of 73.7.

Meanwhile, U.S. import prices fell unexpectedly in August by 0.3%, government data showed, marking the first decline since the start of the year as petroleum costs also retreated.

Excluding a 1.3% drop in imported petroleum prices, import prices declined 0.1% last month, the Labor Department said. It was the first fall in overall import prices, or in the cost of imported petroleum, since January.

Analysts polled by Reuters had forecast a 0.3% rise in import prices in August. Export prices increased 0.2%, matching expectations.

The Reuters/University of Michigan Surveys of Consumers, due at 10 am, should shed further light on whether last month's decline in jobs and market turbulence are taking a toll on sentiment. Expectations are for the preliminary September sentiment index to remain steady at 83.4, a repeat of the final August number.

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