US Retail Sales Rebound in August Amid Rising Gas Prices

US retail sales rebounded in August, showing a better-than-expected 1.2% increase after a revised 0.5% dip in July, according to Commerce Department data.

The strong spending report comes as the Federal Reserve is widely expected to lift its short-term interest rate for the first time in three years to fight stubbornly high inflation.

Rising gas prices have accompanied renewed fighting in the Middle East, with the average price for a gallon of regular gasoline rising overnight to $4.37, about 47% more than a year ago.

Despite this, Americans continue to spend, with gains in most spending categories considered 'decent', led by discretionary sectors such as food services, electronics, and sports and recreation.