August proved to be a good month for consumer spending, and inflation held steady at the wholesale level, according to a pair of economic reports released Friday in Washington.
The Commerce Department announced that consumers continued to spend money in August, pushing retail sales upward for a third consecutive month.
And the Labor Department's Produce Price Index, which measures inflation pressures before they reach the consumer, was unchanged in August.
Retail sales in August rose 0.8% compared to July, assisted by a 1.9% rise in auto sales and a 1.7% increase in furniture and home furnishings sales.
Purchase of building materials was up 0.5% and sales were steady at food and clothing stores. Sales were down 0.4% for appliance and electronics stores where prices are falling rapidly, but up 0.6% at department stores. Chain store sales were reported in decline week to week during most of August.
Newport Communications Senior Economist Jim Haughey said summer quarter retail sales will grow at an 11% annual rate even if sales do not rise in September.
"There are no signs yet of any September weakness," Haughey said, "but there is little information yet about car sales, by far the biggest category. As a result, GDP growth for this quarter should be at least back to 3% after dipping to 1.15% in the spring."
Haughey also said the fact that the Produce Price Index for August remained the same as July -- and 1.6% below last August -- gives the Federal Reserve Board continued leeway to delay raising credit costs.
"Motor vehicle prices fell 0.7%, confirming that manufacturers are still discounting aggressively," he said. "Auto sales were reported earlier up 4% from an already very high July total. Aggressive marketing by the auto companies appears to have boosted GDP growth back to the 3% level during the summer."
Haughey said both truck and trailer prices spiked up in August after little change for most of the year, possibly due to the higher cost of steel. Freight rates also rose in August after declining in July. LTL rates were up 1.5% and TL rates were up 0.2%
The Commerce Department announced that consumers continued to spend money in August, pushing retail sales upward for a third consecutive month.
And the Labor Department's Produce Price Index, which measures inflation pressures before they reach the consumer, was unchanged in August.
Retail sales in August rose 0.8% compared to July, assisted by a 1.9% rise in auto sales and a 1.7% increase in furniture and home furnishings sales.
Purchase of building materials was up 0.5% and sales were steady at food and clothing stores. Sales were down 0.4% for appliance and electronics stores where prices are falling rapidly, but up 0.6% at department stores. Chain store sales were reported in decline week to week during most of August.
Newport Communications Senior Economist Jim Haughey said summer quarter retail sales will grow at an 11% annual rate even if sales do not rise in September.
"There are no signs yet of any September weakness," Haughey said, "but there is little information yet about car sales, by far the biggest category. As a result, GDP growth for this quarter should be at least back to 3% after dipping to 1.15% in the spring."
Haughey also said the fact that the Produce Price Index for August remained the same as July -- and 1.6% below last August -- gives the Federal Reserve Board continued leeway to delay raising credit costs.
"Motor vehicle prices fell 0.7%, confirming that manufacturers are still discounting aggressively," he said. "Auto sales were reported earlier up 4% from an already very high July total. Aggressive marketing by the auto companies appears to have boosted GDP growth back to the 3% level during the summer."
Haughey said both truck and trailer prices spiked up in August after little change for most of the year, possibly due to the higher cost of steel. Freight rates also rose in August after declining in July. LTL rates were up 1.5% and TL rates were up 0.2%
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