United States retail sales in August may grow against the trend, with consumer resilience becoming a key support for the economy.

The overall performance of the U.S. economy was weak in August, with slowing recruitment, rising unemployment, and increasing inflation, signaling pressure from multiple indicators. However, consumer spending may be a bright spot in the midst of adversity. According to FactSet's consensus expectations, retail sales in the U.S. are expected to increase by 0.2% month-on-month in August; excluding cars and gasoline, core retail sales are expected to increase by 0.4% month-on-month, indicating a decline in car sales may drag down overall data performance. Frances Donald, Chief Economist at RBC Economics, stated, "Overall, consumer activity, especially retail sales, has not significantly accelerated, nor has it shown substantial slowdown." She said that the resilience of high-income households' spending is playing an important supporting role in the current environment. The record-breaking bull market in U.S. stocks and the significant surge in house prices have significantly increased household wealth levels, enabling consumers to have spending power even in the face of signs of economic weakness. In terms of the labor market, the U.S. unemployment rate rose to 4.3% in August, the highest level since 2021. Overall recruitment was weak in the summer, with a decrease of 12,000 jobs recorded in June. The latest revision to employment data for 2024 shows that from March 2023 to March 2024, the U.S. added nearly one million fewer jobs than previously estimated, representing the largest revision in decades. Despite sluggish job growth, retail sales have remained robust over the past year. Analysts Jason Pride and Michael Reynolds at Glenmede described this phenomenon as "remarkable," indicating that overall U.S. consumer spending is highly resilient, and they expect this trend to continue into August. Bank of America Corp credit card and debit card transaction data show that consumer spending increased by 0.4% month-on-month in August, a 1.7% year-on-year increase, with spending by both high-income and low-income households showing an accelerating trend. Bank of America Corp economist Aditya Bhave believes that the divergence between spending growth and weak employment is difficult to sustain in the long term, and the future economic outlook will depend on which of the two corrects first: either consumers reduce spending due to deteriorating employment and income expectations, or the labor market recovers to match strong consumer performance. Bhave leans towards the latter, expecting consumer optimism to continue in the coming months. Stephanie Link, Chief Investment Strategist at Hightower Advisors, shares a similar view. She noted that several corporate executives have recently expressed optimism about consumer resilience, including Bank of America Corp CFO Alastair Borthwick, Wells Fargo & Company CFO Michael Santomassimo, and Walmart Inc. CEO Doug McMillon. "Link points out that feedback from businesses suggests that as long as they have the right products or services, consumers continue to spend actively." Pride and Reynolds caution that the impact of tariff policies on consumer behavior should be monitored in the coming months. As the holiday shopping season approaches, price increases due to tariffs may add to household budget pressures and become a potential challenge for consumer growth. This will also be an important consideration for the Federal Reserve in formulating monetary policy. This retail sales data will be released before the Federal Open Market Committee (FOMC) meeting on September 16-17, the last key economic report before the meeting. The market predicts a 96% probability of the Federal Reserve cutting interest rates by 25 basis points this month. The strength of retail sales will directly affect the market's assessment of the Federal Reserve's future policy path.