The Commerce Department reported advance U.S. retail and food services sales increased to $710.8 billion in August, a (+0.1%) increase, this follows a revised increase of (+1.1%) instead of (+1.0%) for July. Retail sales were up (+2.1%) year over year. Total sales for June 2024 through August 2024 were up (+2.3%) year over year. Retail sales are mostly goods and are not adjusted for inflation. Excluding sales at auto dealerships and gas stations, sales were up (+0.2%). Miscellaneous store (+1.7%) and internet retail (+1.4%) led the way in sales increases, while gas stations (-1.2%) and electronics & appliance stores (-1.1%) led in sales declines. Restaurants, the only services category was unchanged. Core retail sales, a measurement that excludes spending on autos, gasoline, building materials, and food services rose (+0.3%) in August and follows an upwardly revised (+0.4%) reading the previous month.

The Federal Open Market Committee (FOMC) announced that it will lower the federal funds rate by 0.50 percentage point to a range of 4.75% to 5.0%. The FOMC, in its statement, indicated that “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.” The FOMC’s latest quarterly economic projections show that the economy is expected to grow 2.0% in 2024 and that the unemployment rate will be at 4.4%. The PCE inflation forecast was lowered to 2.3%, while core PCE inflation was reduced to 2.6%. The median fed funds rate was estimated at 4.4% for 2024, indicating another rate cut this year. The median federal funds rate was estimated at 3.4% for 2025 and 2.9% for 2026.

The National Association of Realtors reported that sales of existing homes dropped (-2.5%) in August to a seasonally-adjusted annual rate of 3.86M, and down (-4.2%) as compared to August 2023. Three of four regions experience sales declines, with the Midwest reporting flat sales. Sales of single-family homes decreased (-2.8%) to a 3.48M annual rate (-3.3% Y/Y) and existing condo sales were unchanged at a 380K annual rate (-11.6% Y/Y). Total housing inventory reported up (+0.7%) to 1.35M (+22.7% Y/Y). Properties typically remained on the market for 26 days, up from 24 days in July. Unsold inventory increased to a 4.2 month run rate, up from 4.1 months. The median existing-home price for all housing was $416,700 (+3.1% Y/Y). All four U.S. regions registered price gains. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.2% as of September 12, down from 6.35% a week earlier and 7.18% a year ago.