U.S. retail sales point to healthy pace of consumer spending

U.S. retail sales data published on Tuesdays provided the latest sign of sturdy economic momentum and suggested the recent stock market sell-off had little immediate impact on U.S. household spending.

The fairly healthy pace of consumer spending in the U.S. over the past two months points to underlying strength in domestic demand that could strengthen the case for the Federal Reserve to hike interest rates on Thursday.

While other data on Tuesday showed continued weakness in manufacturing, economists said that was unlikely to have much impact on the U.S. central bank’s decision whether to raise rates for the first time in nearly a decade.

According to a report released by the U.S. Commerce Department, retail sales excluding automobiles, gasoline, building materials and food services increased 0.4 percent in August after an upwardly revised 0.6 percent increase in July.

The markets reacted positively to the strong upward revision to the July figures and U.S. stocks were trading higher after the data. The dollar strengthened against a basket of currencies too and rose back above the key 120 yen level.

Focus now turns to the Fed’s policy-setting committee meets on Wednesday and Thursday.

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