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US retail sales barely rise, dented by lower gas receipts

Wednesday, October 14, 2015 - 21:26

[WASHINGTON] US retail sales barely rose in September as cheaper gasoline weighed on service station receipts, but gains in purchases of automobiles and other goods pointed to solid domestic demand that could shield the economy from slowing global growth.

The Commerce Department said on Wednesday retail sales edged up 0.1 per cent last month after being flat in August.

Economists polled by Reuters had forecast retail sales rising 0.2 per cent in September after a previously reported 0.2 per cent increase in August.

Retail sales excluding automobiles, gasoline, building materials and food services slipped 0.1 per cent after a downwardly revised 0.2 per cent gain in August. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Core retail sales previously were reported to have advanced 0.4 per cent in August. Economists had forecast core retail sales rising 0.3 per cent last month.

The mixed report suggests underlying strength in domestic demand despite a weakening global economy and a slowdown in job growth over the past two months, which have diminished expectations of a US rate hike this year.

Most economists expect the Federal Reserve will raise its benchmark overnight interest rate in December, but financial markets are only pricing in an increase early next year. The US central bank has kept its short-term interest rate near zero since late 2008.

Economic growth has softened in recent months, mainly because of weak exports, declining capital spending in the energy sector due to lower oil prices and a so-called inventory correction, which have hurt manufacturing activity.

In September, receipts at service stations fell 3.2 per cent, the largest fall since January, after falling 2.0 per cent in August. Excluding gasoline, retail sales increased 0.4 per cent last month.

Sales at auto dealerships increased 1.7 per cent after rising 0.4 per cent in August. Clothing store sales rose 0.9 per cent in September. Receipts at building materials and garden equipment stores fell 0.3 per cent, while sales at furniture stores rose 0.6 per cent.

Receipts at sporting goods and hobby stores increased 0.9 per cent and sales at restaurants and bars rose 0.7 per cent. Sales at electronics and appliance stores slipped 0.2 per cent. Sales at online stores fell 0.2 per cent.

REUTERS