Retail sales slumped by 0.4 percent in value terms following a contraction in July. On an unadjusted annual basis, sales volumes rose by 2.4 percent.

With nominal sales distorted by rising prices, sales volumes declined in August by 0.5 percent.

Over the three months to August, sales volumes softened by 1.0 percent over the previous three-month period, leaving Italian consumers with some work to do in September if sales are not to subtract from third quarter economic growth. Gross domestic product declined by 0.4 percent in the second quarter after a strong performance in the opening months of the year.

The government recently reduced its forecast for 2023 growth to 0.8 percent, which could prove to be a challenging goal if consumer spending remains subdued.

The Italian RPI now stands at minus 14 and the RPI-P at minus 13.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are expressed in nominal terms but volume statistics are also available. Autos are excluded. Only a very limited breakdown of subsector performance is available in the first report but much greater detail is provided in the following month's release. The Italian National Institute of Statistics (Istat) is the main producer of official statistics in Italy.

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.