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U.S. retail sales rose 0.3% in August

Yahoo Finance Live anchors discuss the rise in August U.S. retail sales.

Video Transcript

[AUDIO LOGO]

BRAD SMITH: Also, let's talk about retail sales. Those numbers out this morning. And retail sales coming in stronger than expected in August, rising 0.3% versus expectations of 1/10 of a percent decline there.

And looking across some of the categories here from the data that dropped early this morning, particularly here as we think about the monthly sales for retail and food services, adjusted for some of this seasonal variation, the holiday trading day differences. It came in at $683.3 billion, just to put a dollar figure on what we actually saw here. And you're looking at some of the categories. Of course, the largest increase there in gasoline. But that one of the major necessities, of course, that--

JULIE HYMAN: But that was month-- that was year-over-year.

BRAD SMITH: Year-over-year, right.

JULIE HYMAN: If you look at the month-over-month, you saw decline in gasoline store-- gasoline station sales because the price of gasoline has gone down. So month-over-month, it makes sense that it would go down. It was down by 4.2% on a month-over-month basis.

So I'm looking at those categories on that month-over-month basis to see kind of what stands out here. Motor vehicle sales up, which comports with what we saw in CPI that new car prices are up as well.

So a lot of the-- you know, it's hard to tease out in this current environment when so much is dictated by price, how much of what's going on in retail sales is price and how much is volume. How much is demand and how much is just the people are maybe are buying the same amount of stuff, it just costing them more.

BRIAN SOZZI: If I had one of those penalty flags in football I would throw it onto the desk here because I didn't like this report. You look at clothing--

JULIE HYMAN: OK. [LAUGHS]

BRIAN SOZZI: You look-- you only see clothing and clothing accessory sales not up much. General merchandise sales, not up much. Miscellaneous store retail sales, they were actually up a little bit, too, as well. Nonstar retailers, that's online, they were actually down month-over-month. What does that tell you?

A lot of retailers did not have a blowout back-to-school shopping season. Now, we still have a little bit of September data to get here, but we have retailers that came into back-to-school with loads, loads, loads of inventory. And these numbers don't suggest that they moved through all of that stuff. So I would be surprised to see some weakness in retail stocks here.

JULIE HYMAN: I mean, the year-over-year numbers were still relatively strong though when you look at those different categories. So I guess it depends on how you slice it.

BRAD SMITH: Yeah, and I mean, going into this back-to-school sale, we knew that there would be so many discounted and promotional efforts that everyone from the likes of Walmart and Target, all the way down to the more niche retail players, a Foot Locker even, and for all of the footwear sales that we've seen go forward, there's actually overflow inventory that they're putting into some of their other subsidiary stores because they've got so much of the inventory.

And so with all of that in mind, there was a mix of promotional but also at the same time so much inventory that was starting to come in that they still had to move through. And I think for how people are purchasing-- and we talk about this all the time-- the credit card purchases, I think, are gonna be key to watch going forward from this point, too, because it really tells us even more about the mindset of how the consumer and the comfort of the consumer spending right now with cash versus just swiping the card right now.

JULIE HYMAN: Yeah.

BRIAN SOZZI: I read this report here. Kohl's, probably another bad quarter. Smiley face down. That's what I have for you folks here because Kohl's, not going good, looking good into the holiday shopping season. Well, they caught a downgrade here this morning. We'll talk about it later. This retail sales report says they had a sticky quarter, too.

JULIE HYMAN: Only the most sophisticated analysis.

BRIAN SOZZI: Real time. Real time.

JULIE HYMAN: Frowny face--

BRIAN SOZZI: Frowny face down, Kohl's--

JULIE HYMAN: Funny face--

BRIAN SOZZI: --right there.

JULIE HYMAN: Frown--

BRIAN SOZZI: Good to be back.

JULIE HYMAN: --of this report

BRIAN SOZZI: Missed you guys.