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WASHINGTON – US consumers limited spending on restaurants and department stores in September, resulting in low retail spending for the second month in a row.
Retail sales and restaurants rose 0.1% in September, seasonally adjusted, the Commerce Department said Monday. This exceeded economists' expectations of a 0.7% increase over a month and corresponds to the August expense rate.
"The September numbers were indisputably clear, but a lot was going on," Amherst Pierpont economist Stephen Stanley said in a note to clients, highlighting the impact of high retail spending in the spring and summer, as well as that hot weather back-to-school clothing sales have declined.
Stagnant sales in September were mainly due to a 1.8% drop in sales in food services and drinking places, the largest monthly decline in this category in almost two years. Economists have said that restaurant sales were probably affected by Hurricane Florence, which landed on North Carolina's north coast in mid-September.
The Census Bureau said it could not isolate the effects of the hurricane, although companies surveyed in its survey say the storm "has had both positive and negative effects on their sales data, while others said they had not been touched at all. "
While motor vehicle sales rebounded in September after a dip in August, sales were down 0.1% in September, excluding motor vehicle forecasts. Economists' expectations of a 0.4% rise were then missing and the biggest drop since May 2017.
Consumer spending is one of the main drivers of the US economy and accounts for about two-thirds of economic output. Overall, consumer spending was strong in the second quarter, a trend that, according to Monday's report, is expected to weaken towards the end of the third quarter and is a potentially troubling signal for retailers preparing to sell. enter the holiday season.
However, economists said that September's spending was probably hampered by Hurricane Florence and that underlying consumer spending remained on track.
"The bottom line still seems like a pretty solid quarter for growth in consumer spending," said Jim O'Sullivan, economist, High Frequency Economics Ltd, in a note to customers.
Sales in department stores decreased by 0.8%. Sales by non-store retailers, such as purchases made online or from mail-order catalogs, increased by 1.1%.
Retail sales data can be volatile from one month to the next. Consumer confidence measures have remained high recently, supported by continued job creation and wider economic growth.
The Federal Reserve closely looks at consumer consumption data as an indicator of economic growth, and central bank officials have pointed out that high consumer spending is a factor in their decision to raise their interest rate. reference in September from 2% to 2.25%. The rate is generally expected to increase again by a quarter point in December.
The Department of Commerce's Retail Sales Report is available at http://www.census.gov/retail/marts/www/marts_current.pdf.
Write to Harriet Torry at [email protected]
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