Auto sales fuel U.S. retail spending increase

Despite declining sales in recent years, auto makers are bouncing back as consumer demand improves. Retail sales ticked up 0.2 percent in August, with demand for automobiles leading the growth, Reuters reported. Without autos, sales would have only increased 0.1 percent.

Inventories also experienced a slight increase at 0.8 percent in August, which could have more merchants feel confident about their retail sourcing expansion. Big ticket items, such as automobiles, furniture and electronics and appliances seem to make up more of sales than other categories. In comparison, retail buying for smaller purchases like apparel and sporting goods both saw decreases last month. While consumer sales were less than expected, some economists projected increases in spending down the road as economic conditions improve.

"Beyond the third quarter, spending momentum should accelerate further as improving labor market fundamentals and further gains in the housing market recovery provide a more favorable backdrop for spending activity," said Millan Mulraine, senior economist at TD Securities in New York to Reuters.

Auto sales at dealerships grew 0.9 percent last month after seeing a 0.5 percent decline in July.

Automakers report surge in sales in U.S., European markets

While consumer demand for the automobile market expanded, major auto manufacturers announced improved performance,  Investors' Reports said.

Tesla Motors, known for its electric vehicles like the Model S, is entering the European auto market in a big way as more countries like Germany push toward renewable energy usage.

"This year has already been one of tremendous growth and expansion throughout Europe for Tesla and Model S," Elon Musk, Tesla co-founder and CEO, told the source. "Before the end of this year, our European operations will expand even further."

Ford said its sales surpassed the performance of the overall industry in August in European markets. Ford officials also reported an increase in sales of 2.3 percent year-over-year while total industry auto sales decreased 5.7 percent year-over-year.

"This was Ford's best August and August year-to-date figures since Ford started tracking retail share in 2010, and August also marked the seventh consecutive month of retail share increase for Ford," said Roelant de Waard, vice president of marketing sales for Ford in Europe.

In the U.S., General Motors saw double digit increases in its retail sales for August. GM said 275,847 vehicles were delivered in the U.S., rising 14.7 percent year-over-year. Retail sales grew even more at 22.1 percent YOY despite sales of fleet vehicles decreasing 8 percent YOY. Kurt McNeil, vice president of U.S. sales operations at GM, said the company felt confident about its business outlook as it continues to launch new products.

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