WASHINGTON — Retail sales rose in August by the largest amount in five months, adding to evidence that a late-spring economic swoon was temporary and not the start of another recession.
Retail sales increased 0.4 percent last month, the Commerce Department said Tuesday. It was the second straight monthly increase and the biggest gain since March. Excluding a decline in autos, retail sales increased 0.6 percent. That followed two relatively flat months and a sharp drop in May.
A separate Commerce report said inventories held by businesses jumped in July by the largest amount in two years, while sales rebounded after two months of declines. The rebound in sales was an encouraging sign that consumer demand is rising after two weak months. Businesses build up their stocks when they anticipate stronger retail demand in the months ahead.
The strength in August retail sales came in a number of areas from department stores to clothing stores and sporting- goods outlets. However, bigger-ticket items such as furniture and electronics fell last month.
Retail sales rose a revised 0.3 percent in July after posting back-to-back declines in May and June. Those decreases had raised concerns that the economic recovery was losing strength and that a second recession was possible. Consumer spending accounts for 70 percent of total economic activity.
Even with the sales rebound in July and August, economists expect 2 percent growth in the second half of this year. That would be better than the 1.6 percent growth rate in the April-to-June quarter. But it would be well below the January- to-March quarter’s 3.7 percent growth rate and not enough to lower the 9.6 percent unemployment rate.
