Despite widespread economic uncertainty, U.S. consumers increased their spending in August, with back-to-school and auto purchases helping to buoy the numbers. Retail and food services sales were up 0.3 percent from the previous month, totaling $683.3 billion, according to the latest advance report from the U.S. Census Bureau.
As spending on gasoline declined, sales of motor vehicles and parts jumped 2.8 percent. Take away that spending, and retail sales actually fell 0.3 percent.
Back-to-school shopping also helped offset the declines in gas purchases, with categories such as department stores and apparel showing gains.
"Consumers are beginning to breathe a sigh of relief from lower gas prices, giving shoppers the opportunity to spend on personal care and back-to-school items, and continue to return to pre-pandemic spending patterns," said Naveen Jaggi, the president of Retail Advisory Services at JLL, a research firm.
Balancing out the good news were some updated July sales numbers, which were revised down to a 0.4 percent drop from what was previously a flat reading.
Of course this level of demand may not last through the year, as consumers feel the pinch from what some economists predict will be a slowdown in income growth.
"Continued modest growth in consumer spending in Q3 should be followed by a significant slowdown in Q4 and some retrenchment in spending in the first half of 2023 as weaker labor market gains curb income growth," wrote Lydia Boussour, lead U.S. economist for Oxford Economics, in an email release.
It's also worth noting that the retail report does not adjust for inflation, so the gains were driven by a combination of both higher prices and higher demand.
Overall, the retail numbers fit into a recent trend of economic data that does not give a clear picture of where the economy is headed.
Given this uncertainty, some analysts say retailers should be happy for any gains at all.
"Retailers would probably like to be growing more, especially relative to inflation, but I’m not sure they could realistically hope for much more," said Ted Rossman, a senior industry analyst for Bankrate. "Consumer spending habits are changing as the pandemic continues to recede and inflation remains high."
Next up, he added, is holiday shopping, which is likely to again change the narrative.
