US Retail Sales Surged 1.2% in August, Blowing Past Forecasts and Fueling Fed Rate-Hike Pressure

U.S. retail sales jumped 1.2% in August, the biggest monthly gain in five months and well above the 0.8% increase economists had forecast, according to Commerce Department data released Wednesday. The result reversed July's 0.5% decline and pointed to renewed consumer momentum heading into the fall.

The strength was broad-based across nearly all of the report's 13 categories. Sales excluding autos rose 1.4%, and the control group, the measure most closely tied to GDP calculations, also climbed 1.4%. Gas stations led all categories with a 3.1% gain, while building materials were the sole category to fall.

Import prices added to the inflation picture, rising 0.7% for the month and 7.0% year over year, with petroleum up 27.3% annually. Export prices increased 0.6% for the month and 8.6% year over year. Together with the control group's outsized gain, the data keeps pressure on the Federal Reserve to hold or raise rates, as demand shows little sign of slowing despite an elevated rate environment.