Retail sales rose modestly in August

Retail sales increased modestly in August despite market turmoil as consumers continued to benefit from low gasoline prices and strong job and income growth.

Sales at stores and online rose 0.2%, the Commerce Department said Tuesday, slightly below the 0.3% increase projected by economists. Excluding volatile autos and gasoline, sales advanced 0.3%. Commerce slightly revised up its sales estimate for July from 0.6% to an even stronger 0.7%.

In August, sales rose solidly at health and personal care stores, grocery stores, clothing stores, general merchandise stores, sporting good stores and restaurants. But despite a strong housing market lately, they slipped at building material retailers and fell sharply at furniture stores.

The Federal Reserve is expected to closely scrutinize the report as a barometer of consumer spending as it weighs its first interest rate hike in nearly a decade at a two-day meeting that begins Wednesday.

Consumer spending has picked up in recent months after a choppy showing early in the year -- gains that some economists attribute to milder weather after a harsh winter and Americans' growing belief that low pump prices will be around for a while.

But consumer confidence measures have fallen since mid-August amid a sharp selloff in stocks that has dented household wealth.