Retail sales top expectations as Fed prepares for rate cut

Consumer spending remained strong in August as U.S. retail sales beat expectations, lending more credibility to the Federal Reserve's pending reduction in interest rates.

Retail sales shows a minor increase of 0.1% in August, largely due to a rise in online sales, according to Tuesday's data from the Commerce Department's Census Bureau.

But the slight rise comes against a prediction of a 0.2% decrease, per data from Bloomberg News -- a surprising surge before the Federal Reserve's anticipated cut in interest rates.

August retail sales, excluding automobiles and gas, rose 0.2%, just shy of estimates of a 0.3% jump. The data also revealed a positive revision of the previous month's retail sales data, which came in at 1.1%.

The news is unlikely to impact the Fed's decision to lower its benchmark rate on Wednesday, when the central bank likely will make a 0.25% or 0.50% cut.