Total retail and food sales for September fell 0.3% in September from August, below even the most pessimistic market forecasts. Some of the sting is drawn by the upward revision to August of up 0.6% (previously up 0.4%), but it finishes off the third quarter on an unexpected down note. However, total sales were up a solid 4.1% compared to September 2018 and sales excluding motor vehicles were up 3.7%. A one-month disappointment should not diminish that consumer spending has been active and could well pick up again in October. Consumer confidence did take a hit in September but has shown signs of improvement for October.
“Core” retail sales — sales excluding motor vehicles, building materials, and gasoline — were up a scant 0.1% and were revised sharply lower for August to up 0.3% (previously up 1.0%). Compared to a year-ago, the core was up 4.9%.
Some of it reflects retrenchment after a strong month. Sales at auto dealers were down 1.0% in September after up 1.9% in August. Building materials were down 1.0% after up 2.3% in the prior month. In spite of some upward pressure on gasoline prices in mid-September, the category fell 0.7% after down 1.3% in August. Some of that may be due to the end of summer vacations and drivers simply buying less gasoline.
Clothing and accessory stores benefited from the start of the school year and had a 1.3% increase for September. The solid housing market led to a gain of 0.6% for furniture, while the value of sales of electronics and appliances was flat. This may have reflected heavy discounting on the part of stores trying to move out merchandise and reduce inventories. I also have to wonder if the UAW strike at GM cut into some retail activity. If so, that is going to be largely lost and won’t be made up more than marginally in future months.
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