US retail sales rose far less than expected in August as shoppers held onto their wallets despite tax rebates and improving consumer sentiment. Total retail purchases rose 0.6pc last month to USD319.2bn, the Commerce Department said, after a downwardly revised increase of 1.3pc in July. The figure was far below the 1.4pc increase expected by economists. Analysts had predicted that better consumer sentiment, tax rebates and back-to-school shopping would translate into stronger sales for retailers.
Excluding sales of motor vehicles and parts, demand for retail goods rose 0.7pc, broadly in line with expectations for a 0.8pc rise. Auto dealerships saw sales rise 0.5pc despite increased incentives such as interest-free financing, after soaring 2.4pc in July. Retail sales represent about a third of final sales in the US economy and about half of consumer purchases. Most services are not included in retail sales. //www.fxcentre.com