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Retail Sales in U.S. Probably Climbed in August on Auto Demand

Higher food and fuel costs along with disappointing gains in payrolls and wages may take a toll on household finances, making it a challenge for merchants such as Kohl’s Corp. and Macy’s Inc. Photographer: Victor J. Blue/Bloomberg
Higher food and fuel costs along with disappointing gains in payrolls and wages may take a toll on household finances, making it a challenge for merchants such as Kohl’s Corp. and Macy’s Inc. Photographer: Victor J. Blue/Bloomberg

Sept. 14 (Bloomberg) -- Retail sales probably improved for a second month in August as consumers overcame a lack of jobs and stagnant wages, economists said before a report today.

Purchases climbed 0.8 percent, matching the July advance, according to the median estimate in a Bloomberg survey of economists before today’s Commerce Department figures. Other reports may show consumer prices rose in August for the first time in five months and industrial production declined.

Higher food and fuel costs along with disappointing gains in payrolls and wages may take a toll on household finances, making it a challenge for merchants such as Kohl’s Corp. and Macy’s Inc. Labor-market weakness prompted Federal Reserve policy makers yesterday to take another step to spur the three-year expansion.

“We’re not in a decline, so that’s good, but we’re not breaking out to good growth,” said Ken Mayland, chief economist at ClearView Economics LLC in Pepper Pike, Ohio. “The economy is still limping along.”

The Commerce Department will release the figures at 8:30 a.m. in Washington. Estimates of the 84 economists surveyed ranged from gains of 0.3 percent to 1.5 percent.

Auto sales have been a consistent bright spot as Americans replace aging vehicles. Cars and light trucks sold at a 14.5 million annual rate in August, the industry’s strongest month since 2009, compared with a 14.1 million pace in July, Ward’s Automotive Group data show. Among U.S.-based carmakers, sales rose 10 percent at General Motors Co. and 14 percent at Chrysler Group LLC.

Economic Fundamentals

“Economic fundamentals remain modest but stable,” Jenny Lin, a senior U.S. economist at Ford Motor Co., said during a Sept. 4 conference call. Ford car and light-truck sales rose 13 percent last month, more than estimated. “Consumer confidence is stable as compared to July. The housing sector shows signs of revival.”

Back-to-school promotions and cooler temperatures in the Northeast drew shoppers into stores in the second half of August, according to Retail Metrics, based in Swampscott, Massachusetts.

Same-store sales rose 2.7 percent, beating the average estimate for a 1.8 percent gain, the research company reported last week. Sales at The Gap Inc., the biggest U.S. specialty-apparel retailer, climbed 10 percent last month from the same period in 2011. Macy’s, owner of its namesake and Bloomingdale’s department stores, posted a 4.1 percent gain.

‘Some Spending’

“People have to do some spending,” said Chris Christopher, director of U.S. and global consumer economics research at IHS Global Insight Inc. in Lexington, Massachusetts. “They can’t just hunker down forever.”

Retail shares have outpaced the broader market. The Standard & Poor’s Supercomposite Retailing Index has surged 27 percent this year, compared with a 16 percent gain for the S&P 500.

Higher gasoline prices may have driven up receipts at service stations, the Commerce Department’s figures, which aren’t adjusted for inflation, may show. Regular-grade gas prices have climbed to an average of $3.87 per gallon, up 54 cents since the start of July, according to AAA, the nation’s largest motoring organization.

The pickup helped boost the consumer price index in August by the most since June 2009. The cost of living increased 0.6 percent after no change in July, according to the median projection in the Bloomberg survey.

Prices excluding volatile food and fuel probably rose 0.2 percent after a 0.1 percent gain in July, the survey showed.

Manufacturers Struggling

A Fed report may show manufacturers are struggling with the global economic slowdown. Output at the nation’s factories, mines and utilities in August was unchanged after a 0.6 percent increase, according to the Bloomberg survey median.

In a bid to stimulate the economy to help fuel job growth, the Fed yesterday said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing.

The Fed said it would probably hold the federal funds rate near zero “at least through mid-2015.” Since January, the Fed had said the rate was likely to stay low at least through late 2014.

The economy added 96,000 workers in August, fewer than the 130,000 projected by the median forecast of economists surveyed by Bloomberg. The unemployment rate fell to 8.1 percent after 368,000 Americans left the workforce. Last week, the number of people filing first-time claims for unemployment benefits rose to their highest in almost two months.

                          Bloomberg Survey

================================================================
                               CPI     Core   Retail     Ind.
                                        CPI    Sales    Prod.
                              MOM%     MOM%     MOM%     MOM%
================================================================
Date of Release              09/14    09/14    09/14    09/14
Observation Period            Aug.     Aug.     Aug.     Aug.
----------------------------------------------------------------
Median                        0.6%     0.2%     0.8%     0.0%
Average                       0.6%     0.2%     0.8%    -0.1%
High Forecast                 0.9%     0.4%     1.5%     0.7%
Low Forecast                  0.2%     0.1%     0.3%    -1.0%
Number of Participants          85       84       84       81
Previous                      0.0%     0.1%     0.8%     0.7%
----------------------------------------------------------------
4CAST                         0.7%     0.2%     1.0%    -1.0%
ABN Amro                      0.6%     0.2%     0.7%     0.3%
Action Economics              0.5%     0.1%     0.5%    -0.2%
Aletti Gestielle              0.5%     0.2%     0.7%    -0.1%
Ameriprise Financial          0.6%     0.2%     0.8%     0.1%
Banca Aletti                  0.4%     0.2%     0.7%    -0.2%
Bank of the West              0.4%     0.1%     0.6%     0.3%
Bank of Tokyo-Mitsubishi      0.7%     0.2%     1.0%    -0.3%
Bantleon Bank AG              0.6%     0.2%     0.7%     0.0%
Barclays                      0.8%     0.2%     0.7%    -0.1%
Bayerische Landesbank         0.5%     0.2%     0.7%     0.0%
BBVA                          0.5%     0.2%     0.7%     0.3%
BMO Capital Markets           0.6%     0.2%     0.8%     0.0%
BNP Paribas                   0.8%     0.1%     1.0%    -1.0%
BofA Merrill Lynch            0.6%     0.2%     0.9%     0.2%
Briefing.com                  0.6%     0.1%     1.0%    -0.3%
Capital Economics             0.6%     0.1%     1.0%    -0.6%
CIBC World Markets            0.7%     0.2%     0.8%    -0.2%
Citi                          0.6%     0.2%     0.8%    -0.3%
ClearView Economics           0.3%     0.2%     0.6%     0.2%
Comerica                      0.4%     0.2%     0.5%    -0.5%
Commerzbank AG                0.6%     0.2%     1.0%     0.0%
Credit Agricole CIB           0.7%     0.2%     1.0%     0.1%
Credit Suisse                 0.7%     0.2%     0.8%    -0.6%
Daiwa Securities America      0.4%     0.1%     0.8%    -0.2%
Danske Bank                   0.4%     0.2%     1.1%     0.1%
DekaBank                      0.8%     0.2%     1.0%     0.0%
Desjardins Group              0.7%     0.2%     0.7%     0.0%
Deutsche Bank Securities      0.5%     0.2%     1.0%    -0.8%
Deutsche Postbank AG          0.5%     0.2%     0.5%     0.0%
DZ Bank                       0.7%     0.2%     0.3%     0.1%
Exane                         0.6%     0.2%     0.9%     0.0%
Fact & Opinion Economics      0.5%     0.2%     0.8%    -0.2%
First Trust Advisors          0.6%     0.2%     0.8%    -0.3%
FTN Financial                 0.6%     0.2%     0.6%    -0.1%
Goldman, Sachs & Co.          0.5%     0.1%     0.8%    -0.1%
Helaba                        0.5%     0.2%     0.7%     0.1%
High Frequency Economics      0.7%     0.2%     1.1%    -0.7%
HSBC Markets                  0.6%     0.2%     0.9%     0.1%
Hugh Johnson Advisors         0.6%     0.1%     0.3%     0.2%
IDEAglobal                    0.4%     0.2%     0.4%     0.2%
IHS Global Insight            0.7%     0.2%     1.0%    -0.7%
Informa Global Markets        0.4%     0.1%     0.9%     0.0%
ING Financial Markets         0.3%     0.2%     0.5%     0.2%
Insight Economics             0.6%     0.1%     0.9%    -0.2%
Intesa Sanpaulo               0.5%     0.2%     0.7%     ---
J.P. Morgan Chase             0.7%     0.1%     1.2%    -0.6%
Janney Montgomery Scott       0.6%     0.1%     1.0%     0.0%
Jefferies & Co.               0.7%     0.1%     0.8%    -0.5%
John Hancock Financial        0.2%     0.1%     0.8%     0.7%
Landesbank Berlin             0.4%     0.1%     0.6%    -0.5%
Landesbank BW                 0.5%     0.2%     0.5%     0.2%
Lloyds Bank                   0.5%     0.2%     0.6%     0.2%
Maria Fiorini Ramirez         0.7%     0.2%     ---      ---
Market Securities             0.7%     0.2%     0.8%    -0.3%
MET Capital Advisors          0.2%     ---      1.0%    -0.2%
Mizuho Securities             0.4%     0.1%     0.6%     0.2%
Modal Asset                   ---      ---      0.7%     ---
Moody’s Analytics             0.6%     0.2%     0.8%    -0.1%
Morgan Stanley & Co.          0.7%     0.2%     1.2%     ---
National Bank Financial       0.6%     0.1%     0.3%     0.2%
Natixis                       0.5%     0.2%     0.5%     0.2%
Nomura Securities             0.5%     0.2%     1.1%    -0.5%
Nord/LB                       0.5%     0.2%     0.7%     0.1%
OSK Group/DMG                 0.7%     0.2%     0.9%    -0.5%
Pierpont Securities           0.7%     0.2%     0.8%    -0.6%
PineBridge Investments        0.5%     0.2%     0.8%     0.2%
PNC Bank                      0.7%     0.2%     0.7%    -0.5%
Raiffeisenbank International  0.6%     0.2%     0.7%    -0.2%
Raymond James                 0.5%     0.1%     0.6%    -0.2%
RBC Capital Markets           0.7%     0.1%     0.7%     0.0%
RBS Securities                0.7%     0.1%     1.1%    -0.6%
Regions Financial             0.7%     0.2%     0.8%    -0.2%
Scotiabank                    0.4%     0.2%     0.8%     0.1%
SMBC Nikko Securities         0.7%     0.3%     0.8%     0.0%
Societe Generale              0.7%     0.1%     1.5%    -0.6%
Southern Polytechnic State    0.9%     0.4%     ---      ---
Standard Chartered            0.5%     0.2%     0.8%     0.2%
Stone & McCarthy              0.5%     0.2%     0.7%    -0.2%
TD Securities                 0.5%     0.2%     0.8%     0.1%
UBS                           0.9%     0.2%     1.1%    -0.7%
Union Investment              0.3%     0.2%     0.5%     0.6%
University of Maryland        0.5%     0.2%     0.5%     0.3%
Wells Fargo & Co.             0.7%     0.2%     0.7%     0.0%
Westpac Banking Co.           0.6%     0.2%     0.7%     0.3%
Wrightson ICAP                0.7%     0.1%     1.0%    -0.7%
================================================================

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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