- Gus Faucher, an economist at PNC Financial Services Group Inc.
Retail sales in the U.S. rose at the fastest pace in four months in August, a sign that job growth in recent months has boosted consumer spending. Retail and food sales rose 0.6% from July to a seasonally adjusted $444.4 billion, according to the Commerce Department. Excluding automotive purchases, sales picked up 0.3% from July, while stripping out both autos and gasoline, sales rose as much as 0.5% in August. The data suggests that Americans' reluctance to spend has faded somewhat, even though their wages have yet to increase by much. The advance in retail sales could boost overall economic growth following an uneven first half of the year as consumer spending accounts for 70% of the economic activity. Economists expect the world's number one economy to grow at a 3% annual rate in the rest of the year. The economy expanded at a 4.2% rate during the second quarter after contracting at a 2.1% rate during the first quarter, according to the Commerce Department.
Separately, the U.S consumer confidence rose to the highest level in 14 months in September, as household's economic outlook brightened. The Thomson Reuters/University of Michigan preliminary consumer sentiment index increased to 84.6, the highest gauge since July 2013, from 82.5 the month before. Ongoing improvement in the labour market, gains in stock portfolios and a drop in gasoline prices have underpinned household confidence in recent months.
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