US Retail Sales Fell in September
October 16 2019 - 9:00AM
Dow Jones News
By: Amara Omeokwe and Sarah Chaney
WASHINGTON--American shoppers pulled back on spending in
September, signaling a key support for the U.S. economy this year
could be softening amid a broader global economic slowdown.
Retail sales, a measure of purchases at stores, at restaurants
and online, decreased a seasonally adjusted 0.3% in September from
a month earlier, the first monthly decline since February, the
Commerce Department said Wednesday. Excluding autos, retail sales
were down 0.1% in September.
Economists surveyed by the Wall Street Journal expected a 0.2%
increase in both total sales and in sales apart from autos.
Wednesday's report suggests consumer spending was on less solid
footing, amid concerns that trade tensions are weighing on the
global economy and dampening consumers' outlook.
Consumer spending is the main driver of the U.S. economy,
accounting for more than two-thirds of economic output.
September's decrease in sales was driven in part by a 0.9%
decline in spending on vehicles, which reflects a pullback from a
strong 1.9% gain in August.
The slowdown in retail sales follows recent data that have
signaled uncertainties around trade are weighing on other parts of
the global economy. Personal consumption expenditures-a separate
measure of U.S. consumer spending-slowed more than expected in
August. Manufacturing- and service-sector activity in the U.S. and
eurozone has also seen a slowdown. Meanwhile, a survey from the
University of Michigan found U.S. consumers were feeling more
positive in early October, but were still cautious.
Forecasting firm Macroeconomic Advisers predicted last week that
U.S. gross domestic product grew at a 1.4% seasonally adjusted
annual pace in the third quarter, compared with a 2.0% annual rate
in the second quarter and a 3.1% pace in the first.
While retail sales can be volatile from month to month, the
broader trend this year shows steady growth. Retail sales rose in
August by a revised 0.6%, more than previously estimated. Sales
increased 1.5% in the July-through-September period compared with
the previous three months, as consumers have been buoyed by an
unemployment rate at a half-century low and prices that have risen
modestly despite a U.S.-China trade war that only recently showed
signs of easing.
Trey Kraus, owner and president at Carltons Men's and Women's
Apparel in Rehoboth Beach, Delaware, said he raised prices on
almost every item in his store because of U.S. tariffs placed on
Chinese imports. The store carries upscale clothing, and Mr. Kraus
said the higher prices have deterred some of his customers from
buying multiple items at once.
"Even though our business is up year over year, without the
[price] increases, I would've anticipated five to 10% more in
volume than what we are experiencing," Mr. Kraus said.
Still, he characterized the store's foot traffic as strong and
said he has an optimistic outlook into the first quarter of
2020.
"I believe consumer confidence is still high in spite of a lot
of the news that's out there," he said. "I don't know what the
statistics say, but that's what I'm experiencing."
The Commerce Department's retail sales report can be found at
http://www.census.gov/retail/marts/www/marts_current.pdf.
(END) Dow Jones Newswires
October 16, 2019 08:45 ET (12:45 GMT)
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