Retail sales driven sharply higher

What I got with Cash for Clunkers

Take a peek at the heaps (no offense) these 6 turned in -- or tried to turn in -- to get their Cash for Clunkers deal.

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NEW YORK (CNNMoney.com) -- Retail sales surged in August, with the Cash for Clunkers program giving auto sales an extra boost, the government reported Tuesday.

The Commerce Department said total retail sales jumped 2.7% last month, compared with July's revised decline of 0.2%. Economists surveyed by Briefing.com predicted August sales increased 2%.

Sales excluding autos and auto parts rose 1.1%, compared to a 0.6% decrease in July. Economists expected a gain of 0.4% in August sales, excluding auto purchases.

"With broad-based gains, it's hard to say any sector is a standout, which is great," said Adam York, analyst at Wells Fargo Securities. "We had promising core numbers, but we don't want to call a trend out of one month."

Clunkers revs up auto sales: The decline in July had snapped two straight months of gains, surprising economists who expected an increase on car sales from the Cash for Clunkers trade-in program.

However, the August index got a lift from the Clunkers program, which launched July 27. Vehicles purchased after July 1 were eligible for refund vouchers worth $3,500 to $4,500 on traded-in cars with a fuel economy rating of 18 miles per gallon or less.

The program ran through its initial $1 billion in its first week, and lawmakers approved an additional $2 billion in funding on Aug. 7. Car dealers had until Aug. 24 to sign deals under the program.

The Clunkers benefit was clear in the auto sales index, which rose 11.9% over July. Some of the other biggest sales winners were gasoline stations, whose sales rose 5.1%, as well as clothing and department stores, which each rose 2.4%.

"We expected a big jump in autos, obviously, but we got decent increases elsewhere when we expected only modest gains," said Wells Fargo's York.

But furniture store sales slipped by 1.6%, and building/garden equipment fell by 1.2%.

The Clunkers program may have had "unintended consequences" in that it cannibalized sales in non-auto sectors, said Ellen Davis, a vice president at the National Retail Federation.

"While this is good news for automakers, it might not be good news for retail," Davis said. "Many Americans are now saddled with another monthly bill that will take away from what they're able to spend on discretionary merchandise."

York said it was "tough to say" whether the broad gains will hold in future months, though September auto sales will certainly reverse without the Clunkers benefit.

"We'll be watching whether these core numbers will hold onto gains or give them back," York said. "It's unclear whether this can continue despite the weak labor market."