|Month over Month||0.3%||0.3%||0.4%||0.3%|
|Year over Year||1.3%||1.7%||1.6%|
Retail sales rose 0.3 percent on the month in August which, following a marginally smaller revised gain of also 0.3 percent in July, yielded their first back-to-back increase since October/November 2014. Unadjusted annual growth was 1.3 percent, down from 1.6 percent last time. Volume sales were 0.2 percent higher than in July when they grew 0.4 percent.
August's monthly headline rise reflected a 0.3 percent advance in non-food purchases and a 0.1 percent increase in food. Both subsectors have now recorded two successive gains.
Today's data put average volume purchases in July/August 0.3 percent above their second quarter mean and, without an improbably large setback in September, guarantee a positive contribution to third quarter real GDP growth. Promisingly, Istat's measure of consumer confidence hit a 13-year high in September and buying intentions were up sharply. Accordingly, there is reason for hope that the apparent pick-up in consumer sector momentum will provide a reasonably solid platform for spending heading into the key Christmas period.
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The monthly change in the headline figure, which is reported in volume terms, is only disaggregated into food and non-food categories.
With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
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