(Bloomberg) — U.S. unexpectedly rose in August as a pickup in purchases across many categories more than offset weaker demand for vehicles. 

Commerce Department figures on Thursday showed that overall retail sales increased by 0.7% after a revised 1.8% drop in July. The largest increase in sales in five months was 1.8% for August without autos.

A Bloomberg survey of economists found that the median forecast for retail sales declined by 0.7%. Forecasts ranged from a drop of 3.3% to an increase in sales growth to 1.1%. 

The report showed that U.S. stocks-index futures saw a reduction in losses, while bonds fell.

The unexpected improvement in sales is due in part to back-to-school shopping, and payments for millions families with children. It also suggests that there’s a resilient demand for goods. This report revealed that non-store retail outlets, general merchandise and furniture stores had seen a rise in receipts.

Demand for services like travel and leisure is being slowed by the delta variant. Retail sales data revealed that receipts from bars and restaurants, which are the sole spending category, stagnated during August. Grocery store receipts increased 2.1%.

However, the rise in Covid-19-related infections and rising prices, as well as persistent supply chain problems, led to a series of recent downgrades to economic growth projections for third quarter. 

Earlier this month, economists at Goldman Sachs Group Inc (NYSE:). downgraded their third-quarter consumption forecast to a 0.5% annualized decline because of delta’s impact on services spending.

A separate report from the Federal Reserve Bank of New York on Thursday showed that an index of service business activity declined 13 points between September and 14.4, suggesting softer growth. A second gauge indicated a decline in business conditions.