Retail sales in the United States rebounded strongly in August, rising 1.2% and surpassing economists’ expectations, according to data released by the Commerce Department. The increase followed a revised 0.5% decline in July and exceeded the anticipated 0.7% gain. The figures reflect continued consumer spending momentum despite persistently high inflation and rising gasoline prices.

Excluding gas station sales, retail purchases still increased by 1.1% in August, highlighting the ongoing resilience of American consumers. The data are not adjusted for inflation. Consumer confidence, however, weakened in July, as reported by the Conference Board, signaling some caution amid economic uncertainty.

Economists attribute part of the volatility to the timing of Amazon's Prime Day sales, which occurred earlier this year in June instead of July, resulting in “seasonal noise” that affected nonstore sales figures. Gasoline station sales also rose due to a significant jump in fuel prices, with the national average price for a gallon of regular gasoline reaching $4.37—about 47% higher than pre-conflict levels earlier this year linked to renewed fighting in the Middle East. Diesel prices rose even more sharply, increasing by 68%, impacting transportation and manufacturing costs.

Despite these pressures, spending categories such as food services, electronics, and sports and recreation experienced healthy gains, according to Michael Pearce, chief U.S. economist at Oxford Economics. The so-called control group, which excludes volatile categories like autos, building materials, gas stations, and food services and is a key gauge for economic growth, rose 1.4% in August.

Retailers have noted that consumers are becoming more selective in their purchases amid rising costs. Some major chains, including Walmart and Macy’s, have used portions of government-issued tariff refunds to reduce prices on certain products. Macy’s Chief Executive Tony Spring indicated that the company received $116 million in tariff refunds, which have helped lower prices on items such as furniture and fine jewelry to attract buyers.

The robust spending occurred alongside the Federal Reserve’s decision to raise short-term interest rates for the first time in three years, aiming to combat stubborn inflation. Analysts from the National Retail Federation (NRF) observed that retail sales have consistently outperformed forecasts this year. Mark Mathews, chief economist at the NRF, also noted a slight moderation in spending disparities — commonly referred to as a K-shaped recovery — where higher-income households generally fare better than lower-income consumers.

Looking ahead, the NRF’s Global Port Tracker projects that import volume at major U.S. container ports will peak in September, suggesting retailers are preparing for strong demand in the coming months. This activity further underscores the persistence of consumer spending despite economic headwinds related to inflation and global geopolitical tensions.