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Dow Jones NewsSep 16, 12:40 PM UTC
MW Retail sales are strong for the third month in a row in a good sign for the economy
By Jeffry Bartash
Households spent lots of money online and at restaurants
People shop for pet supplies. Americans haven't cut back on spending much despite trade wars and a slower economy.
Retail sales rose strongly in August for the third month in a row, signaling that U.S. households continue to spend at healthy levels despite worries about lingering inflation and a weakening jobs market.
Receipts at retail cash increased 0.6% last month, the government said Tuesday, and outlays in July were revised higher. That was twice as strong as Wall Street expected.
Car buying was a big contributor, but Americans spent a lot of money at online stores and ate out more often.
Car buyers have been buying more vehicles than usual for the past several months to avoid anticipated price increases in the coming months as tariffs take full effect.
Retail sales represents a large slice of consumer spending, the main pillar of growth for the U.S. economy.
Spending has been up and down this year as shoppers time their purchases to beat tariffs, but the overall trend has been strong enough to keep the economy expanding.
Rising inflation might be playing a part, too. Americans have also had to spend more on certain items that are heavily imported such as coffee and auto parts whose prices have risen.
Big picture: What's enabling Americans to spend at healthy levels is relatively high job security and a low level of unemployment, but the labor market has developed widening cracks that threaten to hurt the economy.
The Federal Reserve is widely expected to cut interest rates this year to provide a spark, but it's unclear how lower rates will spur more hiring.
Businesses have been reluctant to pay more for labor until the trade wars died down and they knew how much tariffs are going to cost them.
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open mixed in Tuesday trading. Stocks are trading at all-time highs.
-Jeffry Bartash
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09-16-25 0840ET
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