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WASHINGTON -- Retail industry sales for August rose 6.5 percent over last year and .3 percent seasonally adjusted over July, even though August saw some of the highest gas prices, according to the National Retail Federation.
Total retail sales for the back-to-school season -- which include autos, gasoline and restaurants -- increased 6.7 percent from last year and was up .2 percent seasonally adjusted over July. This contrasts to the .2 percent drop that economists had predicted for overall retail sales, the Wall Street Journal reported.
"Remember how we all thought that consumer spending would eventually tank, weighted down by high energy costs and the end of the housing boom?" said Joel Naroff of Naroff Economic Advisors. "The rumors of the consumers' demise remain just that."
The Journal also reported that gas station sales decreased 1 percent from last month’s 1.6 percent increase.
"With a successful back-to-school selling season behind them, retailers can now look to the fourth quarter with a little more optimism," said the Federation's chief economist Rosalind Wells.
"Declining gas prices could provide a nice psychological boost for consumers just in time for the holidays," she added. Since peaking in August, gas prices have fallen nearly 50 cents per gallon, Stephen Stanley, chief economist for RBS Greenwich Capital, told the newspaper. "Consumer spending is going to explode, probably in September, October and maybe November."
The National Retail Federation estimates that back-to-school or back-to-college sales totaled $54.2 billion for 2006.