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US retail sales give cautionary sign on consumer demand
[Washington] US retail sales declined in September even when factoring out weakness at auto dealers and gasoline stations, providing a surprisingly cautionary sign for the strength of consumer demand.
Total retail sales dropped 0.3 per cent during the month, the Commerce Department said on Wednesday. Drops in receipts at gasoline stations and auto dealers dragged on the reading.
Analysts had expected a fall in retail sales, as auto production has cooled and oil prices have fallen sharply in recent months on signs of slowing global economic growth.
What came as more of a surprise was a drop in so-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product. Economists polled by Reuters had expected the reading to increase. Instead, it fell 0.2 per cent in September.
Sales at clothing retailers dropped 1.2 per cent and receipts at sporting goods shops edged 0.1 per cent lower.
Sales at electronics and appliance stores, however, jumped 3.4 per cent, while receipts at building materials and garden equipment suppliers declined 1.1 per cent.
Receipts at auto dealerships fell 0.8 per cent, as did sales at service stations. The drop in gasoline sales reflected declining oil prices and is potentially positive for the broader economy. This could free up income and support discretionary spending in the months ahead.
Retail sales account for a third of consumer spending. REUTERS