NEW YORK (CNN/Money) - Retail sales rose in the United States in August, the government said Friday, indicating consumers might be a little more willing to spend than previously thought.

The Commerce Department said retail sales rose 0.8 percent to $306.2 billion after jumping a revised 1.1 percent in July. Excluding volatile automobile sales, retail sales rose 0.4 percent after rising 0.2 percent in July. Economists, on average, expected retail sales to rise 0.5 percent overall and 0.1 percent excluding autos, according to Briefing.com.

"The retail sales figures clearly prove that betting against the consumer is a sucker's bet," said Anthony Chan, chief economist at Banc One Investment Advisors. "Not surprisingly, the ex-auto figure on retail sales tears down the argument that consumers are only buying cars and houses."

Separately, the Labor Department said its producer price index, a measure of wholesale inflation, was unchanged after falling 0.2 percent in July. Excluding food and energy prices, "core" PPI fell 0.1 percent after falling 0.3 percent in July. Economists expected PPI to rise 0.2 percent and core PPI to rise 0.1 percent, according to Briefing.com.

The University of Michigan's consumer sentiment index for September fell to 86.2 from 87.6 in August, according to a Reuters report. The survey is available only to paying subscribers. Economists, on average, expected a sentiment reading of 88, according to Briefing.com.

On Wall Street, blue-chip stocks fell while Treasury bond prices rose.

Though they are a small part of total consumer spending, retail sales are still an indication of how willing consumers are to keep spending -- critical to the economy, since consumer spending fuels about two-thirds of gross domestic product (GDP), the broadest measure of the nation's economy.

Sluggish sales at chain stores such as Wal-Mart (WMT: Research, Estimates) and Target (TGT: Research, Estimates) in August led some economists to worry that consumers were finally beginning to show signs of strain after carrying the economy out of a recession that began in March 2001.

Such fears, combined with other disappointing economic data, have kept alive slim hopes that Federal Reserve policy makers will cut short-term interest rates at their meeting scheduled for Sept. 24.

Fed Chairman Alan Greenspan told Congress Thursday that the Fed needed to cut its expectation for GDP growth in the rest of 2002. But Greenspan still saw growth and said there was plenty of economic stimulus in the pipeline, indicating he saw little need to cut rates right away. Friday's data did little to make a cut more likely.

"Greenspan has to give reassurance that, if things deteriorate, the Fed is willing to act," Chan said. "But the underlying structure of the economy seems pretty good."

Automobile sales, driven by aggressive dealer incentives such as zero-percent financing, have been a strong point of the economy this summer. Friday's retail sales report said auto sales jumped 1.9 percent in August following a 4-percent gain in July. Auto sales account for about a quarter of all retail sales.

Furniture sales rose 1.7 percent after falling 0.7 percent in July. Sales at sporting goods, hobby, book and music stores rose 2.9 percent after rising 0.6 percent in July.