U.S. retail sales surprise in August, gold price trims losses

(Kitco News) U.S. retail sales unexpectedly rose 0.3% last month following a downwardly revised drop of 0.4% in July, according to the latest data from the U.S. Commerce Department. Economists were expecting to see a rise of 0.2% in last month’s headline number.

Excluding gasoline sales, retail sales were up 0.8%. On the other hand, core sales, which strip out vehicle sales, fell short of expectations, falling 0.3% last month versus the projected advance of 0.1%. The report’s control group, which strips out autos, gas, building materials, and food services, was unchanged.

An advance in retail sales in August was a surprise as many economists expected a slowdown in consumer activity as the Federal Reserve aggressively tightens rates. However, after looking at the data more closely, economists had a more cautionary take.

“While total retail sales advanced in the U.S. in August, the growth was negated by a downward revision to the prior month, and the momentum in prices also amplified gains in many categories,” said CIBC Capital Markets senior economist Katherine Judge. “The headline was bolstered by gains in autos, restaurants, building materials, and a more modest drop in gasoline sales than expected, although the strength in autos and restaurants was magnified by higher prices.”

After the data was released, December Comex gold remained under heavy pressure but trimmed early-morning losses, last trading at $1,700.10, down 0.53% on the day, after hitting a daily low of $1,690 an ounce.