[News] U.S. Retail Sales Beat Expectations in August, but Markets Still Bet on Aggressive Fed Rate Cuts

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The U.S. retail sales slightly increased in August, as reported by the U.S. Census Bureau on September 17. The U.S. Retail sales rose by 0.1% month-over-month in August, down from 1% in July, but better than market expectations of -0.2%. On a year-over-year basis, retail sales grew by 2.1%, lower than the previous month’s 2.7%.

The increase this month was primarily driven by online store sales, which saw a monthly growth of 1.4%. However, this was partially offset by a 0.1% decrease in automotive-related sales and a 1.2% decline in gas station sales.

Core retail sales (excluding automotive-related sales) rose by 0.1% on a monthly basis, while double-core retail sales (excluding automotive and gas station sales) increased by 0.2%. The control group retail sales, which exclude automobile sales, building materials, gasoline stations, and food services, rose by 0.3%.

In summary, while August retail sales showed some resilience in U.S. consumer spending, certain declines may have been driven by falling prices. Nevertheless, the market appeared to overlook the retail sales data, as FedWatch indicated that the probability of a 50-basis-point rate cut had risen to 65%, up from 50% the day before.