Retail sales rose in September
Retail sales rose .7% on the month, well above the .3% Dow Jones estimate. Excluding autos, sales were up .6%, also well ahead of the forecast for just .2%, according to a CNBC report.
Sales gains were broad based on the month, with the biggest increase coming at miscellaneous store retailers, which saw an increase of 3%. Online sales rose 1.1%, the report said.
According to the report, consumers showed surprising strength in September, boosting retail sales well above expectations despite high-interest rates and worries over a weakening economy. Gas station sales helped propel the headline number, rising 0.9% as prices at the pump accelerated.
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The numbers are not adjusted for inflation, so it indicates that consumers more than keep up with price increases. The consumer price index, released last week, showed headline inflation up 0.4% in September. On a year-over-basis, sales rose 3.8%, compared with the 3.7% increase for the CPI, per the report.
The report quoted David Russell, global head of market strategy at TradeStation, who said, “The U.S. consumer cannot stop spending. All three retail sales reports for Q3 were above estimates, which puts us on track for a strong GDP number later this month. It also gives the Fed zero reason to loosen policy, which keeps the 10-year Treasury yield pushing toward 5%.”
Sales gains were broad based on the month, with the biggest rise coming at miscellaneous store retailers, which saw an increase of 3%. Online sales climbed 1.1% while motor vehicle parts and dealers saw a 1% increase and food services and drinking places grew by 0.9%, good for a yearly increase of 9.2%, which led all categories. There were only a few categories that showed a decline; electronics and appliances stores as well as clothing retailers both saw decreases of 0.8% on the month," the report said.
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The retail report is considered an important factor for the Federal Reserve as officials contemplate the future of monetary policy. While markets largely expect the Fed is done raising rates for this cycle, an unexpectedly strong consumer complicates the equation, the report noted.