Retail sales rose 2.7% in August, according to a government report released on Tuesday. Analysts had expected an increase of 2%.

But the increase is likely to be only temporary - the big boost in sales was led by a 10.6% jump in motor vehicle sales, thanks to the government's (read: taxpayer's) $3 billion Cash for Clunkers program that ended on August 24, 2009.

Retail sales excluding motor vehicles increased by 1.1%, higher than the .4% that analysts had expected. Higher gasoline prices, up by 5.1%, also played a part in higher retail sales - sales excluding motor vehicles and gasoline rose .6%, after a .4% decrease in the previous month.

Consumers are still cautious about spending money in this uncertain economy, but they are spending more than they have over the past year. The increase in August comes after four straight quarterly declines in retail sales.

“Even excluding the strong growth in motor vehicle sales, which was a result of the successful ‘cash for clunkers’ program, this significant increase in consumer spending shows that the Recovery Act and President Obama’s other economic initiatives are succeeding in putting the brakes on the recession,” U.S. Commerce Under Secretary for Economic Affairs Rebecca Blank said. “Accelerated stimulus spending in the second half of this year will create jobs and further stimulate our economic recovery.”

The U.S. Census Bureau reported that advance estimates of U.S. retail and food services sales for August were $351.4 billion, an increase of 2.7% from the previous month, but 5.3% below August 2008. These numbers were adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.

Retail trade sales were up 3% from July 2009, but 6% below last year. Gasoline stations sales were down 26.7% from August 2008 and building material and garden equipment and supplies dealers were down 13.6% from last year.



Source:
Census Bureau of the U.S. Commerce Department