U.S. retail sales rose more than expected in August, posting their strongest monthly increase in five months as spending increased across most major categories, according to data from the U.S. Census Bureau.
Retail and food services sales increased 1.2% from July, exceeding economists’ expectations for a 0.8% gain. July’s reading was revised to a 0.5% decline, which had marked the first monthly contraction since October 2025.
The August increase points to continued consumer spending despite elevated borrowing costs and renewed inflation pressures, although the headline figures are not adjusted for changes in prices.
Gasoline and Online Sales Lead Gains
Gasoline stations recorded the largest monthly increase, with sales rising 3.1%, reflecting higher fuel prices as energy markets remained under pressure from supply disruptions in the Middle East.
Nonstore retailers, a category dominated by online shopping, recorded a 2.6% increase, while miscellaneous store retailers gained 1.9%.
Electronics and appliance stores posted a 1.6% increase. Sales at food services and drinking places and at sporting goods, hobby, musical instrument and book stores each rose 1.2%.
Furniture sales increased 0.9%, while clothing and general merchandise stores each gained 0.7%. Motor vehicle and parts dealers recorded a 0.6% increase, and food and beverage stores rose 0.4%.
Building material and garden equipment stores were the only major category in the report to register a decline, with sales falling 0.2%.
Key Measure for GDP Rises 1.4%
A closely watched measure of consumer spending was considerably stronger than expected.
So-called control-group sales, which exclude food services, auto dealers, building materials stores and gasoline stations and are used as an input in calculating gross domestic product, jumped 1.4% in August. Economists had expected an increase of just 0.4%.
The stronger reading suggests underlying household spending remained resilient during the month even after excluding categories such as gasoline, where higher prices can significantly influence the value of sales.
Because Census Bureau retail-sales figures measure nominal spending, however, the report does not distinguish how much of the increase resulted from consumers purchasing more goods and how much reflected higher prices.
Consumer Spending Remains Key to U.S. Economy
The August report arrives as the U.S. economy faces renewed pressure from energy costs and higher interest rates.
Gasoline’s 3.1% increase was the largest among the categories measured, making the distinction between nominal sales and actual consumption particularly relevant this month.
At the same time, the 1.4% increase in control-group sales provides a broader indication of spending strength because it removes several volatile categories and feeds into estimates of consumer spending in GDP.
The combination of stronger-than-expected headline sales and a sizable increase in the control group indicates that consumer spending entered the final month of the third quarter with momentum, while the extent to which inflation contributed to the nominal gains will require comparison with inflation-adjusted consumption data.
