Retail sales rise; Office attendance hits new high; Builder confidence improves

August’s U.S. retail and food service sales rose 0.6% from the prior month and topped the year-earlier figure by 5%, the Commerce Department reported Tuesday. Consumers spent $732 billion, with monthly gains led by categories such as online-only retailers, clothing and sporting goods stores.

Despite concerns over tariffs and potential inflation effects, spending at food and drinking places fared relatively well, increasing 0.7% for the month and rising 6.5% from a year earlier. The annual gain was topped only by the clothing category at 8.3% and online-only stores at 10.1%

Oxford Economics Deputy Chief U.S. Economist Michael Pearce said the latest retail sales figures indicate spending is back on track after a weak first half, “but we think much of that strength has been concentrated among higher-income households, who are responsible for most spending.”

“Spending among low-income consumers is still under pressure from a weakening labor market, and a policy mix that is weighing on real disposable incomes,” Pearce said in a Tuesday statement from the forecasting firm. “We expect that dynamic to persist in 2026, even as overall spending holds up.” 

Office attendance hit a new post-pandemic peak, with 10 cities averaging 55.8% of their pre-pandemic levels for the week ended Sept. 10. That beat the previous high of 54.9%, reached in the week ended July 16 in tracking by Kastle Systems.

Based on anonymous keycard data from the security technology firm’s office property clients, the 10-city average has consistently tracked above 51% for much of 2025 as companies increase in-office work requirements.

The latest figures showed Austin, Texas, again leading for attendance at 69.8%, with Dallas at 63.5%, Houston at 62.9%, Chicago at 58.7% and New York at 58.2%.

Kastle said its data comes from 2,600 buildings and more than 40,000 tenant offices, reflecting a mix of commercial business types and building types. 

Homebuilder optimism about future sales was up for September despite persistent concerns about rising construction costs and elevated interest rates, according to the latest national survey by the National Association of Home Builders and Wells Fargo. Researchers said builders’ future sales expectations were at a six-month high after more than a year of mostly downbeat sentiment.

Anticipation of what analysts said was an imminent interest rate cut by the Federal Reserve was among factors that buoyed builder optimism. Still, the latest multi-metric confidence index posted at 32, unchanged from August and low by standards of 40 years of tracking. Numbers below 50 generally indicate negative perceptions among builders about business prospects.

“While builders continue to contend with rising construction costs, a recent drop in mortgage interest rates over the past month should help spur housing demand,” NAHB Chairman Buddy Hughes said in a statement Tuesday.

NAHB Chief Economist Robert Dietz noted the 30-year fixed rate mortgage average is down 23 basis points over the past four weeks, reaching 6.35% in the latest Freddie Mac lender survey. “This is the lowest level since mid-October of last year and a positive sign for future housing demand,” Dietz said.