NEW YORK (AP) — Americans kept spending in August despite their escalating fears about the slow economic recovery and surging gas prices.
A range of retailers from discounter Target to club-operator Costco on Thursday reported August sales that beat Wall Street estimates. The results seem to show that what Americans do and say are two different things: The strong sales reports come a day after a private research firm said consumer confidence in August fell to its lowest level since November 2011.
"It shows some resilience among shoppers. Let's face it. There are a whole series of economic headwinds that they are fighting against," said Ken Perkins, president of Retail Metrics, a research firm. "The results show that the consumer isn't dead."
A small group of merchants representing roughly 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue at stores open at least a year, a key measure since it excludes results from locations that open and close during the year. The figures offer a snapshot of consumer spending, which accounts for more than 70 percent of economic activity.
August's results are particularly important because they offer insight into the back-to-school season — the second most important selling period behind the winter holidays — which runs from mid-July through mid-September. Retailers and economists often use the results from back-to-school as a litmus test of how shoppers will behave during the biggest shopping period of the year in November and December.
The gains are an encouraging sign for retailers at a time when consumers are becoming impatient with the slowly improving economy. The New York-based Conference Board's Consumer Confidence Index fell to 60.6, down from a revised 65.4 in July. Economists had expected a reading of 66. The index now stands at the lowest point since November 2011 when the reading was at 55.2, and still far below the 90-reading that indicates a healthy economy.
Several factors may have dampened consumers' moods. Gas prices, which had fell sharply from a peak of $3.94 in April, have begun rising again in the last few weeks. And the jobs and housing markets are showing only modest signs of improvement.
Home prices rose 0.5 percent in June from the same month last year, the first year-over-year increase since the summer of 2010, according to The Standard & Poor's/Case-Shiller home price index that was released Tuesday. And on the job market front, employers added 163,000 jobs in July, the most since February. But that's not enough to keep up with a rising population, and the unemployment rate increased to 8.3 percent from 8.2 percent in June.
Despite their concerns, retailers' sales results show that Americans are spending. Costco Wholesale Corp.'s revenue from stores open at least a year climbed 6 percent, beating the 4.5 percent rise analysts surveyed by Thomson Reuters had anticipated. And Target Corp. reported a 4.2 percent increase in revenue at stores opened at least a year. That was better than the 3.1 percent increase that analysts had expected.
"Sales were stronger in the second half of the month, as guests responded to Target's broad assortment and compelling value for their back-to-school and back-to-college shopping,"
Not every retailer fared well, though. Struggling teen clothing seller Wet Seal Inc. said Thursday that its revenue in stores open at least one year fell 18.3 percent in August as it revamped its clothing offerings. Analysts had expected a 17 percent drop.
The chain said it was trying to make its merchandise attractive to a broader range of consumers while pricing clothes to appeal to adolescent shoppers, its main customers