Retail Sales Research Brief

Spending still up across most categories. After recent revisions, core retail sales rose 0.4 percent in real terms during both July and August, highlighting U.S. consumers’ resilience amid the weakening labor market and tariff-related price pressures. Spending last month was also encouraging on an annual basis, as core retail sales were up 5.4 percent. That said, the full effect of tariffs likely have yet to fully materialize. Many retailers pulled inventories forward in the first quarter, enabling these companies to initially avoid passing costs to consumers. The roughly 30 percent decline in import activity between April and June, however, points to some retailers’ pre-tariff inventories beginning to deplete during the second half of the year. That may spur more retailers to pass the cost of import duties through to consumers.