August Retail Sales: The Consumer Stays in Positive Territory

By SBE Council at 16 September, 2025, 3:12 pm

by Raymond J. Keating -

The topline number in the latest retail and food services sales report from the U.S. Census Bureau showed a nice increase of 0.6 in total retail and food services sales, which came on the heels of a revised up 0.6 percent of July as well.

This points to continued resiliency among consumers. That's good news for businesses, including the small businesses that overwhelmingly populate the retail and food services sectors.

But we have to deal with inflation as well. The numbers in this report, while "adjusted for seasonal variation and holiday and trading-day differences," are not adjusted for inflation. The numbers are in nominal dollars, not real dollars. And over the past three months, inflation has been higher, coming in at 0.4 percent in August, 0.2 percent in July and 0.3 percent in June, as measured by the change in the Consumer Price Index.

So, the gains for August get cut by a hefty margin once inflation is considered. But there were still several sectors showing clear, notable gains in August even with inflation factored in. These were total sales ex-auto and gas (0.7 percent in nominal terms), clothing and clothing accessories stores (1.0 percent in nominal terms), sporting goods, hobby, musical instrument and book stores (0.8 percent), and food services and drinking places (0.7 percent in nominal terms), and leading the way were nonstore (mainly ecommerce) retailers (2.0 percent in nominal terms).

However, the other eight major sectors were either down or basically flat when inflation is considered.

In real terms, retail and food services sales were still up in August. But the good news was diminished by inflation.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of " The Weekly Economist " book series, and 10 Points from Walt Disney on Entrepreneurship .