US retail sales increases are shy in September 2015

US retail sales increases are shy in September 2015

Retail sales rose a seasonally adjusted 0.1 % in September from August, the Commerce Department said on October 13, 2015. Economists had expected a rise in September of 0.2%. The increase was largely due to a 1.8 % month-over-month increase in auto sales. Excluding motor vehicles and parts, sales at other retailers were down 0.3 % in September

Sales slipped at 0.2 % at electronics and appliance stores and non-store retailers, a category that includes online sales. They rose 0.4 % at department stores.

Economists had expected a fall of 0.1 % excluding cars. Overall sales for August were revised down to unchanged from a previously estimated 0.2 % rise and slightly upward to 0.8 % in July.

Overall retail sales have not fallen since January, suggesting that the lower gas prices this year have given Americans a bit more discretionary cash. But excluding autos and gasoline, retail sales were flat. A few bright spots held: U.S. consumers shelled out 0.9 % more on clothing and accessories in September than they did in August, and spent 0.7 % more at restaurants and bars than the prior month. Restaurant spending is up 7.9 % from September 2014.

Scott Wise, president and CEO of Scotty’s Brewhouse, a chain of roughly a dozen sports bars in Indiana, said business at his locations is up anywhere from 5 % to 15 % from the previous year. Recent turmoil in financial markets and slowing job gains haven’t yet made their impact felt, he said. “You’re not going to see a direct correlation between ‘Oh my god, the stock market is down 500 points’ and ‘We’re not going out to dinner tonight,’ ” he said. “You’d have to see something more sustained before people start to tighten up a bit.”

Still, the unexpected softness could change the Federal Reserve’s calculus on the timing of its first interest-rate increase in nearly 10 years. Many central bank officials have said they expect to begin moving rates higher this year, but have said such a move is dependent on incoming data. “The softness of September’s retail sales figures supports our view that the Fed probably isn’t going to hike interest rates until early next year,” said Paul Ashworth, chief U.S. economist at Capital Economics.

Consumer spending makes up about 70 % of economic activity in the U.S. and represents a key measure of the economy’s health. Retail sales account for a big piece of overall consumer spending. Sales at car and other motor vehicle dealerships have risen 9.3 % since September 2014. Sales at gasoline stations fell 3.2 % in September, and are down 19.7 % from September 2014. Gasoline prices were around USD 2.46 in September, down from USD 2.72 in August, and from USD 3.48 in September 2014, according to data from the U.S. Energy Information Administration.

Personal spending, measuring how much Americans paid for everything from home appliances to health care, rose 0.4 % in August from a month earlier, the Commerce Department said in late September. Personal income, reflecting Americans’ pre-tax earnings from salaries and investments, climbed 0.3 % in August.

An upward revision to consumer spending figures drove U.S. gross domestic product figures higher than previously estimated in the second quarter. U.S. GDP advanced at a 3.9 % seasonally adjusted annual rate in the second quarter, up from the previously reported 3.7 %. However some economists warned that this latest report could signal a slower-than-expected third quarter.

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