The economy’s biggest pillar — the American shopper — stood steadfast through a summer of mounting economic challenges characterized by soft global growth and trade uncertainty.
Figures released Friday showed August retail sales advanced more than forecast, while consumer sentiment rebounded from an almost three-year low. Treasury yields and stocks moved higher as the data helped reassure investors that households will continue delivering for the economy and keep it moving forward, albeit at a slower pace.
The value of overall sales rose 0.4% from the prior month, led by motor vehicles and online purchases, after an upwardly revised 0.8% increase in July, according to the Commerce Department. The University of Michigan’s index of consumer sentiment increased 2.2 points to 92, higher than the median forecast in a Bloomberg survey of economists.
Spurred by a resilient labor market and income gains, the consumer remains the chief source of firepower for economic growth that’s slowed amid fragile global demand, uncertainty surrounding trade policy and lackluster factory output.
The report suggests another solid quarter of household consumption, which grew in the April-June period at the fastest pace since 2014.