Good Retail Sales For Holidays

 Financial FAQs

“Advance estimates of U.S. retail and food services sales for August 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $773.9 billion, up 1.2 percent (±0.4 percent) from the previous month, and up 6.0 percent (±0.5 percent) from August 2025.” Census Bureau

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What a difference in just a month! I was overly pessimistic earlier this year when consumers’ confidence was declining on how consumers would behave during the holidays because of the energy shortages and higher tariffs.

Surprisingly, American shoppers are out in force for the first time this fall after several pauses as they rushed to get ahead of rising prices for the holidays.

Retail sales jumped +1.2 percent in August after declining -0.7 percent in July. That’s a huge rise with some inflation indexes above 5 percent. It seems homeowners and investors benefiting from the financial markets can afford more dining out and leisure travel these days.

For good reason. The 162,000 new payroll jobs tallied in August may have emboldened them after miniscule job gains the prior three months. Add in that third quarter economic growth predictions are now clustered around 4 percent because of the A.I. build out and record corporate profits after very meek growth in Q1 and Q2.

The August 162,000 total nonfarm payroll employment was a total surprise, given the average monthly gain of just 31,000 over the prior 12 months. Why the sudden rise? These are largely new service sector jobs, which means summertime travel and leisure activities pick up, schools will soon begin, and nonresidential construction of the A.I. data centers is going full speed.

Employment in food services and drinking places increased by 59,000 in August, well above the average monthly gain of 12,000 over the prior 12 months as well. Local government education added 42,000 jobs in August, offsetting a decrease in the prior month.

Will this reverse the severe job decline since early 2024 at the start of the second Trump administration? It will depend on how consumers are feeling about the economy as I said.

They aren’t feeling that well at present. According to Joanne Hsu, the University of Michigan sentiment survey Director:

“Democrats and Republicans alike posted sizable declines (in sentiments), while independents were little changed from August. Year-ahead expectations for both personal finances and business conditions plunged. With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”

But this is before the new tariffs on our largest trading partner’s Canadian exports kick in that will boost construction costs and vehicle prices even higher.

Maybe some consumers want to enjoy the present while they can rather than worry about the future and what the $trillions being invested in A.I. might do to the job market. What do they know?

LATE BULLETIN—The Federal Reserve just announced a +0.25 percent raise in their Fed Funds rate for the first time in three years, with maybe more raises to come because of the worsening Mideast conflict.

Harlan Green © 2026

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