Indonesian vehicle sales surge 32% in August

US retail sales surged more than anticipated in August, driven by an uptick in consumer spending on motor vehicles and back-to-school purchases, according to the Commerce Department's Census Bureau. Retail sales rose 1.2% in August, following a revised 0.5% drop in July, marking the first decline in nine months. Economists surveyed by Reuters had projected retail sales to rebound 0.8% after a prior reported 0.6% decline in July, with estimates ranging from a 0.2% gain to a 1.1% increase.

The uptick in August also partially resulted from higher petrol prices, which boosted revenues at service stations. Despite high inflation, households continued to spend due to the oil price shock and supply chain disruptions caused by the US-led conflict with Iran. However, consumers have become more selective, focusing on lower-priced goods.

Consumer sentiment declined in September. Spending remains buoyed by consistent wage growth and recent stock market gains. Households are also saving less and drawing from their savings. The retail sales improvement, combined with rising price pressures and a labor market recovering from summer instability, bolsters financial market forecasts that the Federal Reserve will raise interest rates later on September 16.

Retail sales excluding automobiles, petrol, building materials, and food services grew 1.4% in August, compared to a revised 0.4% decline in July, exceeding economists' expectations of a 0.4% rise. Economic growth estimates for the third quarter currently surpass a 2.0% annualized rate, with the economy expanding at a 1.5% pace in the previous quarter.