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US retail sales increase less than expected in September
[WASHINGTON] US 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 per cent last month after a similar gain in August. Economists polled by Reuters had forecast retail sales increasing 0.6 per cent in September.
Retail sales in September rose 4.7 per cent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.5 per cent 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 per cent gain. Consumer spending is being driven by a robust labor market, with the unemployment rate near a 49-year low of 3.7 per cent. Tight labor 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 per cent annualized rate. The economy grew at a 4.2 per cent pace in the second quarter.
Last month, auto sales surged 0.8 per cent after declining 0.5 per cent in August. Receipts at service stations fell 0.8 per cent, likely reflecting a moderation in gasoline prices.
Sales at clothing stores rebounded 0.5 percent after tumbling 2.8 per cent in August. Online and mail-order sales soared 1.1 per cent in September after rising 0.5 per cent in the prior month.
Receipts at furniture stores increased 1.1 per cent. But Americans cut back on spending at restaurants and bars, with sales dropping 1.8 per cent. 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 per cent in September. Spending at hobby, musical instrument and book stores increased 0.7 per cent last month.