August retail sales rise 1.2%, beating forecasts before the Fed decision

Take gasoline stations out of August’s retail report and sales still rose 1.1%. Take out autos, gasoline, building materials and restaurants, and the remaining control group, the slice that feeds into GDP goods spending, rose 1.4%, against a 0.4% forecast.

The Census Bureau’s 8:30 a.m. Eastern advance estimate put U.S. retail and food-services sales at $773.9 billion, up 1.2% from July (±0.4 percentage point) and up 6.0% from August 2025. Economists had penciled in 0.8%, with forecasts running from 0.2% to 1.1%. July’s decline was revised to 0.5% from 0.6%. The figures are adjusted for seasonal and trading-day effects, and they are not adjusted for prices. They landed five and a half hours before the Federal Reserve’s scheduled 2 p.m. Eastern rate decision, a meeting fed-funds futures had already framed as a likely quarter-point increase.

Gasoline, autos and websites

The Bureau of Labor Statistics, on Friday, September 11, reported that gasoline prices rose 3.9% in August and 27.4% over 12 months, while the all-items CPI was up 0.4% on the month and 3.4% over the year. Receipts at gasoline stations, in the Census report, rose 3.1% in August and 21.0% from a year earlier.

Reuters reported the gain reflected households stepping up vehicle purchases and stocking up for the new school year. Motor-vehicle and parts dealers rose 0.6%. Nonstore retailers, the Census line that covers online sellers, rose 2.6%. West Texas Intermediate was $103.59 a barrel as of about 9:50 a.m. Eastern, down $2.24 on the session and still above $100.

A strong register, a weak survey

August’s cash registers and September’s consumer survey are not the same people, and they do not cover the same month. Census measures what stores, websites and restaurants booked in August. The University of Michigan asks a separate sample how they feel now. Its preliminary September reading, published Friday, September 11, fell to 47.8 from 51.7 in August and 55.1 in September 2025, when year-ahead inflation expectations rose to 4.6% from 4.0%.

Joanne Hsu, director of the Surveys of Consumers, said year-ahead expectations for personal finances and business conditions plunged. “With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”

First-hour prices, 2 p.m. still ahead

The household discretionary fund is not a register of clothing, grocery and auto dealers. Amazon and Tesla dominate the S&P 500 consumer-discretionary fund AXLY, graded A.

As of about 9:50 a.m. Eastern, AXLY was at $110.87, unchanged. The equal-weight S&P retail fund BXRT, graded B, was at $83.38, up 0.2%.

Long bonds firmed rather than sold off, even after a spending print that beat the forecast. The 10-year Treasury yield was 4.968%, down from 5.00% on the Treasury’s Tuesday close and from 5.004% in early Wednesday dealing before the Census release. The 20-year-plus Treasury fund BTLT, graded B, was at $81.03, up 0.4%. Fed-funds futures had already implied a 92.5% chance of a quarter-point increase before the retail report, so there was little left for August receipts to add to the hike case. The FOMC announcement is still due at 2 p.m. Eastern, with the chair’s press conference at 2:30 p.m. August spending in dollars was stronger than July and stronger than the forecast. That is an input for the meeting. It is not, yet, a new price on the retail or bond funds a reader can hold.