A report due out today will likely confirm that retail sales improved for the second consecutive month. Consumers created another .8% increase in sales in August, the same rate of increase as in July.
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Prices also may have risen in August. That would be the first time in five months that prices have increased. Industrial production will likely have fallen.
Increases in food and energy prices could hamper the improvement in sales. But if the Fed’s more deliberate action from its September Federal Open Market Committee (FOMC) meeting works, new job growth will translate into greater spending on the part of consumers.
Auto sales are a bright spot in the retail sales component. Sales in August were the strongest since 2009, selling at a 14.5 million annual rate compared to July’s 14.1 million number.
Higher fuel prices have even helped one segment of retailers, service stations. Regular-grade gasoline has risen 54 cents since the beginning of July.
Manufacturing is struggling, however, as a result of weakness in global economies. Output at factories, mines, and utilities was flat in August. That’s better than a decline and hopefully, the Fed’s action will help to create greater demand
at home if demand remains lackluster abroad.