U.S. consumers unexpectedly increased their spending in August, defying predictions that a softening labor market would drag down retail purchases.
Retail sales rose by 0.1 percent in August and the prior month was revised up to a 1.1 percent gain, data from the Commerce Department showed Tuesday.
The rise in sales is unlikely to stall the Federal Reserve’s plans to cut interest rates but they do suggest that the economy is not verging on a downturn, taking away some of the urgency for lower rates.
Economists had forecast a 0.2 percent decline after the preliminary estimate for July showed a one percent increase.
Sales at auto dealers and parts shops declined 0.1 percent.
