September US retail sales trail forecasts

Washington

US retail sales rose less than forecast in September, as a broad-based increase was overshadowed by a drop in restaurant receipts that may reflect the impact of Hurricane Florence.

The value of overall sales rose 0.1 per cent for a second month, compared with the median forecast of economists for a 0.6 per cent gain, Commerce Department figures showed on Monday. So-called retail control-group sales - which are used to calculate gross domestic product and exclude food services, car dealers, building-materials stores and petrol stations - climbed 0.5 per cent, slightly more than estimated.

While purchases at food-services and drinking establishments fell 1.8 per cent, the most since 2016, most other major retail categories showed a gain, suggesting consumption ended the quarter on a solid note. That indicates the biggest part of the economy will withstand the recent stock-market slide amid low unemployment and tax cuts that have boosted take-home pay.

Shopping and consumer activities such as restaurant visits may have been affected in North Carolina and South Carolina in the aftermath of Florence, which made landfall on Sept 14. At the same time, past experience indicates any negative fallout tends to be temporary and reverses in subsequent months.

Steady economic growth and gradual gains in inflation have reinforced investor bets that the Federal Reserve will lift interest rates in December for the fourth hike this year, and stay on a tightening path in 2019.

Estimates for overall retail sales in the Bloomberg survey ranged from gains of 0.3 per cent to 1.1 per cent. The data captured just under half of all household purchases and tended to be volatile. Ten of 13 major retail categories showed increases, according to the Commerce Department data. The broad-based improvement reflected rebounds at car dealers and furniture and home-furnishing stores, which had the biggest gain since April.

Purchases at electronics and appliance vendors also rose the most since June; they may have gotten a boost from Apple Inc's introduction of new iPhone models in late September.

Excluding purchases of cars and petrol, sales were little changed.

Filling-station receipts fell 0.8 per cent, the report showed.

Sales at car and parts dealers rose 0.8 per cent after decreasing 0.5 per cent in the previous month, the Commerce Department data showed. That's consistent with industry reports, which showed sales advanced in September to the fastest pace since March.

Sales rose 0.5 per cent at clothing vendors and 0.3 per cent at general merchandise stores. Purchases in the non-store category, which includes online shops, rose 1.1 per cent following a 0.5 per cent increase. BLOOMBERG