US Retail Sales Jump 1.2% in August, Beating Forecasts as Consumers Keep Spending

Quick Facts

US retail sales rose 1.2% in August, above the 0.8% economist forecast, with 12 of 13 categories posting gains.
The control group, which strips out gas, autos, and building materials, surged 1.4%, its strongest monthly gain since September 2024.
E-commerce accounted for 17.1% of total retail sales in Q2 2026, with online sales up 12.2% year-over-year.

US retail sales rose 1.2% in August, the largest monthly gain in five months, according to Census Bureau data released Wednesday. The result beat the median Bloomberg economist estimate of 0.8% by a wide margin. Adjusted for inflation, sales still grew 0.8%.

The gain was broad. Twelve of 13 retail categories posted increases, including gasoline stations, auto dealers, and online retailers. Gasoline station sales jumped 3.1%, reflecting both higher fuel prices and increased activity. Auto and parts dealers added 0.6%.

Non-store retailers, which includes e-commerce, bounced back 2.6% after a sharp pullback in July. Bars and restaurants rose 1.2%, extending a streak of monthly gains stretching back to April. In-store sales at specialty retailers climbed 4.8%.

The control group, which excludes volatile categories like gasoline, autos, and building materials, surged 1.4% month-over-month. That was the strongest nominal gain for that measure since September 2024.

Year-over-year, total retail sales were up nearly 6%. For Q2 2026, total retail sales reached an estimated $1,986.5 billion, up 2.9% from Q1. E-commerce sales in Q2 grew 12.2% year-over-year and represented 17.1% of all retail sales.

Back-to-school shopping likely helped drive the August numbers. The National Retail Federation projects families with elementary through high school students will spend an average of $863.86 per household on back-to-school purchases this year, boosting general merchandise, clothing, and electronics categories.

Shannon Grein, economist at Wells Fargo, said the consumer “has time and time again surprised us with their resilience.” Peter Boockvar, chief investment officer at OnePoint BFG Wealth Partners, noted that sales held up “in the face of the rise in gasoline prices and real wages that are no longer growing,” adding that a stronger labor market this year has helped underpin spending.

The strong data arrived on the same day the Federal Reserve approved its first interest rate hike in more than three years. The Federal Open Market Committee voted 12-0 to raise the benchmark rate by 25 basis points, bringing the overnight funds rate to a target range of 3.75% to 4%. Fed Chair Kevin Warsh said inflation has been “too high for too long” and the central bank needs confidence that price pressures are moving toward the 2% target “clearly and at sufficient speed.”

Consumer prices rose 3.4% year-over-year, up a full percentage point since energy prices surged. The Fed’s preferred inflation gauge stood at 3.7% in July, with core inflation at 3.3%, well above target.

For retailers, the spending resilience is welcome news, though the macro pressure is real. Walmart reported $6.4 billion in net income for the quarter ending July 31, boosted by a $2.9 billion tariff refund. But same-store sales excluding fuel rose just 2.6%, the slowest pace since early 2020, and shares fell more than 9%. Target received a $994 million tariff refund. TJX collected $331 million. Apple, Nike, Amazon, and FedEx have also reported tariff refunds in recent quarters.

Walmart CEO John Furner said the company is “investing heavily in price because customers need us to and because we believe it drives market share gains over time.” CFO John David Rainey noted that when fuel prices exceed $4 per gallon, consumer behavior shifts, pushing shoppers toward value.

With rates rising and inflation still elevated, operators should expect consumers to remain value-focused heading into the holiday season. The August data shows demand is holding, but the margin for error is narrowing.