U.S. Retail Sales Rose 1.6% in September -- Update
October 13 2017 - 10:14AM
Dow Jones News
By Ben Leubsdorf
WASHINGTON -- Spending at U.S. retailers jumped last month,
boosted by higher car sales and gasoline prices in the wake of
several devastating hurricanes.
Sales at restaurants, retail stores and online-shopping
platforms rose a seasonally adjusted 1.6% in September from the
prior month, the Commerce Department said Friday.
That was the largest one-month increase since March 2015, and
came after sales had ticked down 0.1% in August. Economists
surveyed by The Wall Street Journal expected a 1.7% sales increase
last month.
"The headline number is a big increase in retail sales in
September, but the details, while still solid, aren't nearly as
good," said Gus Faucher, chief economist at PNC Financial Services
Group, in a note to clients. "Much of the increase came because of
Hurricanes Harvey and Irma."
Sales of motor vehicles and auto parts jumped 3.6% last month.
Auto makers had earlier reported stronger unit sales in September,
partly because consumers were replacing cars and trucks damaged by
Harvey and Irma, which battered Texas and Florida in late August
and September.
Excluding autos, retail sales in September rose 1.0%; economists
had expected a 0.8% rise for the measure.
Gasoline prices spiked in September after Hurricane Harvey
disrupted fuel shipments and refinery activity along the Gulf
Coast. Spending at gas stations was up 5.8% in September, not
adjusted for price changes -- the most since February 2013.
Excluding both gas and autos, retail sales were up 0.5% from
August following a 0.1% rise the prior month.
Spending rose last month at home-improvement retailers, grocery
stores, restaurants and nonstore retailers, a category that
includes shopping websites. Sales fell at furniture stores,
electronics retailers and department stores.
Looking forward, overall sales "are likely to fall in October as
gasoline prices have been declining and auto sales will drop after
their surge in September," Mr. Faucher said.
Retail-sales figures tend to be volatile from month to month,
and aren't adjusted for inflation. They exclude spending on most
services, such as housing and medical care.
The Commerce Department said it couldn't isolate the effects of
Harvey and Irma on Friday's report, though it did hear from
companies "that the hurricanes had both positive and negative
effects on their sales data while others indicated they were not
impacted at all."
Hurricanes Irma and Maria devastated Puerto Rico and the U.S.
Virgin Islands last month, but those U.S. territories weren't
included in Friday's report.
Consumer spending accounts for more than two-thirds of total
U.S. economic output. Growth in household outlays has been
supported in recent years by falling unemployment, continued hiring
and moderate pay gains.
The "combination of jobs, a little bit of wage growth, stable
housing [prices] and rising asset prices has left the consumer in a
pretty good place," Citigroup Inc. Chief Executive Michael Corbat
told analysts Thursday.
He added, "A lot of the signs we look for in terms of the
deterioration of the consumer, I've got to say, right now, we just
don't see."
The hurricanes that hit the U.S. in August and September are
expected to weigh on economic growth in the near term, though many
forecasters expect activity will rebound in subsequent months as
rebuilding efforts take shape and affected areas return to
normal.
Nearly all of the 158 Checkers and Rally's restaurants in
Florida closed as Hurricane Irma hit in September, costing the
Tampa-based fast-food chain nearly 600 sales days in total,
according to Chief Development Officer Jennifer Durham.
But soon after the storm passed, "we were able to open
restaurants where our competitors didn't," she said, and the
company saw sales bounce back as powerless Floridians ventured out
in search of food.
On balance, Ms. Durham said, "it's a little bit of a net
negative" for sales. "It'll impact the quarter for sure," she
said.
Despite any hurricane-related disruptions, overall U.S. economic
growth is expected to continue at a healthy pace through the end of
the year.
Write to Ben Leubsdorf at ben.leubsdorf@wsj.com
(END) Dow Jones Newswires
October 13, 2017 09:59 ET (13:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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