According to the data released by the U.S. Census Bureau on Wednesday (September 16th), retail sales in the United States rebounded more than expected in August, marking the largest increase in five months. This indicates that despite rising oil prices, consumers continue to spend, highlighting the resilience of the U.S. economy.
The Census Bureau stated on Wednesday that retail sales in August increased by 1.2% compared to July, surpassing market expectations of a 0.8% increase; and increased by 6% compared to August 2025. Excluding automobiles, gasoline, building materials, and food services, retail sales in the U.S. surged by 1.4% in August, marking the largest increase since September 2024. Economists had initially estimated that core retail sales would grow by 0.4%.
Most of the U.S. stock market rose on Wednesday. The U.S. dollar strengthened against a basket of currencies, while U.S. Treasury yields slightly declined.
Despite the impact of the U.S.-led war with Iran on oil prices and supply chain tensions leading to persistent inflation, household consumption continues. However, consumers have become more budget-conscious, seeking out lower-priced goods. Consumer confidence deteriorated this month.
Steady wage growth and recent stock market gains have supported consumer spending. Meanwhile, household savings have decreased, with individuals beginning to tap into accumulated savings. Strong retail sales performance, coupled with inflation pressures and the labor market regaining stability after experiencing fluctuations for most of the summer, further bolster financial market expectations that the Federal Reserve will likely decide to raise interest rates on Wednesday.
According to Reuters, Bradley Saunders, North American economist at Capital Economics, stated that Wednesday’s data “once again confirms that the (U.S.) economy is fully capable of withstanding higher interest rates, providing ample room for the Fed to raise interest rates to control inflation.”
The August data also showed a 0.6% increase in retail sales at motor vehicle and parts dealers. Earlier industry data this month indicated that car sales soared in August, marking the fastest pace since April 2025. Excluding automobiles and gasoline, sales also grew by 1.2%.
Consumer spending has shown resilience so far this year, driving overall economic growth. Despite the fading boost from tax refunds, low unemployment rates and rising stock prices continue to provide support for households.