US retail sales slow in September

Solid auto sales were a bright spot in an otherwise dismal US retail sales report for September (AFP pic)

WASHINGTON: Retail sales in the United States, a motor of growth, slowed unexpectedly in September as Americans bought less gasoline, and shopped and dined out less, according to government figures released Monday.

Auto sales were a bright spot, however, making the difference between a negative and a positive month, the Commerce Department report showed.

The result put a lacklustre finish in the third quarter but economists said the numbers included some signs of strength.

Total retail sales gained 0.1% in September to a seasonally-adjusted US$509 billion, marking the eighth consecutive monthly increase, the department said.

But economists had been expecting a far larger 0.6% gain.

Even with the modest increase, the result put sales 4.7% higher than September of last year.

Autos sales rose 0.8%, more than making up from the dip in August, but sales at gas stations fell 0.8%.

Excluding the volatile auto sector, monthly retail sales fell 0.1%, also undershooting analysts’ forecasts for a 0.4% gain.

In addition to flagging fuel sales, the monthly number was dragged down by declining business at bars and restaurants, department and grocery stores as well as health and beauty stores.

On the other hand furniture, electronics, building supply and clothing outlets all rose.

And “non-store” retailers like Amazon continued their upward march, adding 1.1% in sales volume, putting that sector up more than 11% year-on-year.

Ian Shepherdson of Pantheon Macroeconomics said Monday the dip in bars and restaurants followed strong growth in the summer, meaning the sector was still above prior trends and further declines were likely.

But a “control” series within the September report, which tracks sales excluding the volatile segments — autos, gas, restaurants and building materials — posted a 0.5% increase over the prior month.

That means third-quarter consumer spending likely matched the 3.8% rise in the April-June quarter.

However, the uptick is “likely is due to the tax cuts so it won’t be sustained,” he wrote in a client note.