U.S. retail sales increase less than expected in September
today Oct 16, 2018
U.S. retail sales barely rose in September as a rebound in motor vehicle purchases was offset by the biggest drop in spending at restaurants and bars in nearly two years.
The Commerce Department said on Monday retail sales edged up 0.1 percent last month after a similar gain in August. Economists polled by Reuters had forecast retail sales increasing 0.6 percent in September.
Retail sales in September rose 4.7 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.5 percent last month. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Data for August was revised down to show core retail sales were unchanged instead of the previously reported 0.1 percent gain. Consumer spending is being driven by a robust labor market, with the unemployment rate near a 49-year low of 3.7 percent. Tight labour market conditions are gradually pushing up wage growth.
The solid core retail sales increase in September pointed to strong consumer spending that should offset anticipated drags on economic growth from a widening trade deficit and persistent weakness in the housing market.
Growth estimates for the third quarter are above a 3.0 percent annualised rate. The economy grew at a 4.2 percent pace in the second quarter.
Last month, auto sales surged 0.8 percent after declining 0.5 percent in August. Receipts at service stations fell 0.8 percent, likely reflecting a moderation in gasoline prices.
Sales at clothing stores rebounded 0.5 percent after tumbling 2.8 percent in August. Online and mail-order sales soared 1.1 percent in September after rising 0.5 percent in the prior month.
Receipts at furniture stores increased 1.1 percent. But Americans cut back on spending at restaurants and bars, with sales dropping 1.8 percent. That was the biggest decline since December 2016.
While the Commerce Department said it was impossible to determine the impact of Hurricane Florence on the data, disruptions caused by the storm could have hurt sales at restaurants and bars last month.
Sales at building material stores nudged up 0.1 percent in September. Spending at hobby, musical instrument and book stores increased 0.7 percent last month.
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