US Retail Sales Robust Ahead of Increase in Tariffs

RAPAPORT... US retail sales rose in August, even as consumer confidence slipped slightly from the previous month amid the escalating trade war. Total sales - excluding automobiles, gasoline andrestaurants - rose 0.4% compared with July and 4.6% year on year, according todata the National Retail Federation (NRF) reported, citing the US CensusBureau. Online and other non-store sales climbed 14% year on year, the NRFnoted. "While consumer attitudes about the economy indicate someretreating optimism, the bottom line is that consumer spending remainedresilient in August, and continued to be a key contributor to US economicgrowth," NRF chief economist Jack Kleinhenz said last week. However, August's sales growth was slightly slower than July's,which could reflect sliding consumer confidence. The numbers in August reflect theperiod prior to the first round of tariffs implemented by US President DonaldTrump. "Trends remain strong, but [the slight dip] could reflectconsumers' concerns about the unpredictability of trade policy," Kleinhenzexplained. "It is too early to assess the impact of the new tariffs that tookeffect at the beginning of this month, but they do present downside risks tohousehold spending." Retailers may offset higher tax rates by raising the price of the goods they sell to reflect the hike. However, they are making an effort to avoid passing on the increase to customers by stocking up on extra goods prior to the levies goinginto effect, the NRF noted.  Imports at major retail ports reached unusually high numbersjust before the most recent tariffs took effect on September 1, and areexpected to surge again before the next round of taxes in December, accordingto the group's Global Port Tracker report. Shipments in August rose 1.8% yearon year to 1.93 million TEU. A TEU is one 20-foot-long cargo container or theequivalent. "Retailers are still trying to minimize the impact of thetrade war on consumers by bringing in as much merchandise as they can beforeeach new round of tariffs takes effect and drives up prices," said JonathanGold, NRF vice president for supply chain and customs policy. Image: Mall of America, Bloomington, Minnesota. (Flickr)