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Retail sales jump the most in five months


(Photo Credit: Reed Saxon/AP)

Retail sales in August experienced the biggest jump in five months, in an encouraging sign that the economy is slowly regaining its footing.

The Commerce Department reported that purchases were up 0.4 percent from July to August as consumers returned to department stories, clothing boutiques, sporting good outlets and a wide range of other shops. Economists surveyed by Bloomberg had expected a rise of 0.3 percent.

Excluding autos, gasoline and building materials, retail sales jumped 0.6 percent--double what economists had forecast.

Retail outlets and local governments have been aggressively courting customers with tax-free holidays and bigger-than-usual back-to-school discounts. Purchases in eight of 13 major categories of retailers increased. Spending was up 1.2 percent at clothing retailers and 0.4 percent at general merchandise shops.

The August report shows a reversal from the spring and summer, when retail sales seemed to indicate that the economic recovery may be stumbling. But the numbers were not strong enough to indicate that sales will pick up significantly in the second half of the year at a time when unemployment remains high and consumers are still uneasy about about household spending.

The bleakest spot in Tuesday's report was auto sales, which fell 0.7 percent as General Motors, Ford, Toyota and other manufacturers struggle with consumers' reluctance to purchase big-ticket items in a shaky economy.

By Ariana Eunjung Cha  |  September 14, 2010; 9:15 AM ET
Categories:  Retail , U.S. Economy  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Morning briefing: Europe's strong recovery slowing
Next: Data Digest: Retail sales stronger than expected


Isn't August back-to-school month? duh.

Posted by: jerrybluegrass | September 14, 2010 10:55 AM | Report abuse

The state of the economy is very high unemployment and growth that is too slow to keep that unemployment from growing some just because of new workforce entrants looking for a job. Small variations above or below expected statistics are not going to change that reality.

Posted by: dnjake | September 14, 2010 11:46 AM | Report abuse

Gosh - couldn't have had anything to do with back to school purchases now could it? No, of course not. It's all due to the brilliance of Obozzo and his nightmarish back alley abortion of an administration.

Posted by: Anonymous | September 14, 2010 12:32 PM | Report abuse

Just when we thought the recovery is sputtering, retail sales and inventories surprise to the upside. This pop is especially positive news considering auto sales are at historical lows.

US Auto Sales long term graph -->

Consumer spending and sustained business investment will lead the way to a true recovery, not government spending. If you think the Retail Sales trend points north, look for plays keep pace. Examples:


Williams Sonoma

If you think the Retail Sales trend is a blip, look for plays that don’t follow it south. Examples:



Posted by: prime99 | September 14, 2010 1:02 PM | Report abuse

It is a no brainer that the Bush tax cuts must be extended to everyone whether rich or poor. The rich, through their ownership and investment in industry, ARE the ENGINES of job growth! This administration will stop at nothing to manufacture CLASS warfare with their stupid thinking, and agenda! Their SOCIALIST agenda is anathema to most Americans and has no place in America! Hopefully the American people will not be fooled again by this smooth talking Obama who is surrounded by socialists and communists in his administration. One can know a person by the company he keeps is a saying that fits well with this administration. VOTE THEM OUT in November and then watch how this economy will change for the better!

Posted by: donn09 | September 14, 2010 1:14 PM | Report abuse

The rich are NOT the engines of job growth.

The middle class IS the engine of job growth.

When a middle class Americans goes shopping, they create demand which creates jobs.

When a middle class American needs a service provided, they HIRE another middle class American to fulfill that service.

When a middle class American buys a house, they HIRE another middle class American to fix and upgrade the house.

When a middle class American saves up money and then uses the money to take out a small business loan to start a small business, they HIRE people to help with that small business.

70% of the economy depends on consumers, that is middle class Americans.

If you believe that we are all slaves to the rich, that we have to give the rich $700 billion of our money so that they will give us jobs, then you have been brainwashed to believe that you need the rich to do everything and that the middle class can do nothing for themselves. Congratulations, you are a steeple and a pawn for the wealthy.

Class warfare is the wealthy holding a gun to the head of the middle class and telling us "give us $700 billion or we will kill all your jobs." I say screw them, the middle class can start their own business, the middle class is not helpless, and the middle class spends more of its money in the U.S. while the wealthy spend more of their money in foreign countries.

It's about creating a STRONG MIDDLE CLASS, not a strong upper-class, stupid!

Posted by: paulflorez | September 14, 2010 3:38 PM | Report abuse

The recovery cycle runs in ups and downs. As we go along, the ups get higher and the downs level out.

Face it, Teaba&&er morons, Obama and the Democrats are saving this country. The deficit Bush/Republican majority left us with as a result of the "tax cuts for the wealthy" has decreased 8% under Democrats.

Posted by: Anonymous | September 14, 2010 4:14 PM | Report abuse

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