August retail sales up 0.4 percent, best report in 5 months

WASHINGTON (AP) — 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 today. 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.