US Retail Sales Continue to Impress

17 September 2002

Concerns over unemployment and possible conflict in Iraq do not seem to have seriously dented Americans’ spending plans.

New figures from the Commerce Department show that retail sales grew by 0.8% in August – a slight slowdown from revised expansion of 1.1% in July and 1.4% in June but nevertheless ahead of analysts’ expectations.

Demand for cars, boosted by the incentives war between the major brands, remained high, though auto sales growth slowed from 4.3% in July to 2.2% last month. The more surprising finding is that sales excluding cars rose 0.4% in August, double the previous month’s 0.2%.

However, there may be trouble ahead. The consumer confidence index of the University of Michigan dropped from 87.6 in August to 86.2 in a preliminary September reading.

The barometer of the current climate tumbled from 98.5 to 95.9, while the measure of future expectations dipped from 80.6 to 80. These figures, based on 300 interviews, will be updated later this month.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff