U.S. Retail Sales Rose 0.6% in September
October 14 2016 - 9:10AM
Dow Jones News
WASHINGTON--U.S. retail sales rose at a solid pace in September,
rebounding after a modest pullback the prior month and signaling
that consumers are set to support stronger economic growth during
the second half of the year.
Sales at retail stores, online retailers and restaurants
increased 0.6% from the prior month to a seasonally adjusted
$459.82 billion in September, the Commerce Department said Friday.
Sales had declined 0.2% in August, revised up from an initially
estimated 0.3% decline, and rose 0.1% in July.
Economists surveyed by The Wall Street Journal had expected a
0.6% increase from August.
The headline figure was boosted by spending on motor vehicles
and gasoline. Excluding the automotive category, retail sales rose
0.5% in September; economists had expected a 0.4% rise. Excluding
both automotive and gasoline purchases, September sales were up
0.3% from August.
Compared with a year earlier, total retail sales in September
were up 2.7%, outpacing the modest rise in consumer prices over the
past year. The retail-sales data were not adjusted for
inflation.
Sales in the third quarter were up 0.7% from the strong second
quarter and rose 2.4% compared with the third quarter of 2015.
Total sales in the first nine months of the year were up 2.9% from
the same period in 2015.
Consumer spending accounts for more than two-thirds of U.S.
economic activity as measured by gross domestic product. Supported
by gradually rising wages as the labor market tightens, a surge in
household outlays during the second quarter helped
inflation-adjusted GDP grow at a modest 1.4% annual pace despite
weakness in other areas including inventories, residential
construction and government expenditures.
Economists have predicted a pickup in GDP growth during the
recently ended third quarter, aided by healthy consumer spending.
Despite August's weak retail sales, gauges of consumer sentiment
have remained buoyant in recent months.
"Household spending has been the main contributor to real GDP
growth over the past four quarters, and, with solid gains in
employment and household income and upbeat consumer sentiment, this
sector should continue to support growth over the second half of
the year," Federal Reserve Vice Chairman Stanley Fischer said last
weekend.
Forecasting firm Macroeconomic Advisers, as of last week,
predicted GDP growth at a 2.8% annual rate in the third quarter.
The Atlanta Fed's GDPNow model was somewhat less optimistic,
pegging the third-quarter growth rate at 2.1%. The Commerce
Department will release its first official estimate for
third-quarter GDP on Oct. 28.
One headwind for the economy in recent months has been
uncertainty stemming from the heated U.S. election campaign, which
could prompt some businesses and consumers to delay major spending
or other financial decisions.
"There is just great uncertainty as to what's going to happen in
the U.S., in particular, as a result of the outcome of the
election," Yum Brands Inc. Chief Executive Greg Creed told analysts
last week, adding, "I think people are maybe just hunkering down a
little bit."
Most categories in Friday's report saw sales rise last month,
including a 0.8% increase in spending at restaurants and bars--the
largest one-month jump for the category since February.
American consumers last month continued to shift their spending
to e-commerce platforms like Amazon.com from traditional
brick-and-mortar retailers. Sales in the nonstore category,
including online retailers, were up 11.0% in the first nine months
of 2016 compared with a year earlier. Sales at department stores
were down 4.8% over the same period.
Motor vehicle and auto-parts sales in September were up 1.1%
from the prior month, according to Friday's report. Automakers had
earlier reported U.S. unit sales of cars and light trucks in
September were up from August but down from one year earlier.
Gasoline-station sales jumped 2.4% last month, potentially
reflecting rising prices at the pump. The average price for a
gallon of regular gasoline in September was $2.16, up four cents
from August, according to the U.S. Energy Information
Administration.
Sales at electronics and appliance stores fell 0.9% in September
despite the release of Apple Inc.'s new iPhone 7. The release of
new iPhone models in September 2015 had coincided with the only
monthly sales increase for the electronics category during the
second half of last year, according to Commerce Department
data.
Write to Ben Leubsdorf at ben.leubsdorf@wsj.com and Eric Morath
at eric.morath@wsj.com
(END) Dow Jones Newswires
October 14, 2016 08:55 ET (12:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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