US retail sales rise despite Trump tariffs: August growth beats estimates; consumer spending cushions economy

Retail spending in the US exceeded expectations in August, rising 0.6 percent month-on-month, government data showed on Tuesday, even as President Donald Trump’s tariffs continue to impact the global trade environment. On a year-on-year basis, retail sales climbed 5 percent.The Commerce Department data highlighted that motor vehicle and parts dealers saw a 0.5 percent increase in sales, while restaurants and bars recorded a 0.7 percent rise. Grocery store sales were up 0.3 percent, reflecting resilient consumer demand in key sectors, AFP reported.However, some areas showed signs of caution. Furniture store sales fell 0.3 percent from July, and general merchandise outlets dipped 0.1 percent, with department stores in particular experiencing a decline. This suggests selective pullback in discretionary spending.Economists note that while importers and retailers have absorbed part of the increased tariff burden, the sustainability of this approach is uncertain. Many businesses had stocked up in anticipation of higher duties earlier this year, but replenishing inventory could involve higher costs going forward.Since returning to office in January, Trump has imposed a 10 percent tariff on goods from multiple trading partners, later raising rates for dozens of economies including the European Union, Japan, and Vietnam. Sector-specific levies on steel, aluminum, and automobiles have further added to cost pressures.Analysts caution that these tariffs could fuel inflation over time, although current data indicates that the impact on consumer prices remains limited, and any broader effects are yet to fully materialise.