August Sales Up As Confidence Index Gains

Retail sales gained 0.4% and 0.6% without building materials, gasoline and auto sales, demonstrating that consumers may be getting more generous in their spending in the year’s second half. Retail sales in August represent the strongest monthly performance since the first quarter of 2010.

The news on retail revenues emerged from the Commerce Department just as Investor’s Business Daily and TechnoMetrica Market Intelligence released their Economic Optimism Index, which rose to 45.3 in September from 43.6 in August. While an improvement, the new figure remains below 50, the term that signals emerging optimism in the economy.

Kohl’s, JCPenney and Macy’s August results all beat analyst estimates in August, as did those at Costco, Ross Stores and Family Dollar. Target, TJX and BJ’s reported comparable store sales increased but below analyst estimates. Among the retailers that don’t report monthly sales are Walmart, Williams-Sonoma and Bed Bath & Beyond.

While sales gained in August as back to school spending heated up, a strongly promotional environment may have eroded earnings. Quarterly earnings announcements will tell which retailers sustained declines.