U.S. retail sales rise 0.6% in August as tariffs cloud the outlook

U.S. retail sales rose 0.6 percent in August from July, the Commerce Department said Tuesday, a stronger-than-expected gain driven in part by back-to-school shopping and broad strength across categories even as tariffs and signs of weakness in the labor market cloud the outlook. The increase followed a revised 0.6 percent gain in July and exceeded economists expectations of roughly 0.2 percent.

Excluding volatile auto sales, retail spending climbed 0.7 percent in August, and the control group that feeds directly into gross domestic product also advanced 0.7 percent, pointing to solid momentum in consumer outlays. Category gains included a 1.0 percent rise in clothing, 0.8 percent in sporting goods and hobbies, and a 0.5 percent increase at motor vehicle dealers. Electronics and appliance stores were up 0.3 percent, online retailers rose about 2 percent, and restaurant sales increased 0.7 percent.

Officials and analysts cautioned that part of the strength may reflect higher prices rather than stronger real demand. Tariffs imposed earlier this year have contributed to price increases on some imported goods, and auto sales have been notably volatile amid new levies on foreign-made...