Retail sales rise 0.1% — less than expected — boosting odds for big rate cut

US retail sales unexpectedly rose last month — a surprisingly strong result that likely lowers the odds for a large rate cut this week from the Federal Reserve.

Data released on Tuesday by the Commerce Department showed that the value of retail purchases rose 0.1% in August — surpassing economists’ forecasts for a 0.2% drop — as cash-strapped consumers showed resilience in the face of a wobbly economy.

The better-than-expected numbers come as traders hope the Federal Reserve will issue highly-anticipated interest rate cuts after their policy meeting Wednesday.

Retail sales for the previous month had spiked 1%, above expectations of 0.4% growth. Ten of 13 categories showed growth in July.

Of the 13 categories listed by the Commerce Department, four of them showed declines in August, according to government data.