Retail sales jump 1.2% in August

US retail sales rebounded sharply last month, the largest increase since March, as households boosted purchases across goods and services including restaurants and bars.

“The pace of underlying consumer spending looks to be advancing at a healthy rate.”

Economists upgrade growth forecasts

The stronger-than-expected retail report prompted Goldman Sachs to raise third quarter GDP growth to 3.0% and JPMorgan to boost it to 3.5%, up from earlier estimates.

Core retail sales surge 1.4%

Excluding autos, gasoline, building materials and food services, core retail sales jumped 1.4% in August, the largest gain since September 2024, beating economist forecasts of 0.4%.

Fed raises rates a quarter point

The Federal Reserve raised its benchmark overnight interest rate by 0.25% to the 3.75%-4.00% range and signaled further increases ahead as it battles inflation.

Import prices surge 7.0% yearly

Import prices jumped 0.7% in August and soared 7.0% year-over-year, the largest increase since August 2022, driven by higher costs for computers, semiconductors, and machinery.

Chip prices up 19.1% annually

Imported computer and semiconductor prices surged 19.1% year-over-year, reflecting the artificial intelligence buildout and strong demand for advanced technology.

Consumers tapping savings, losing power

Households are spending despite high inflation by drawing down savings and benefiting from stock market gains, but lower-income families struggle with rising energy and food costs.

“More consumers are losing their purchasing power.”

Current pace unsustainable, economists warn

With gasoline prices rising sharply and inflation-adjusted wages declining, economists say August's retail sales momentum cannot continue into the fourth quarter and 2027.

“Progress on inflation simply isn't good enough.”