United States retail sales edged up in September, curbed by plunging gasoline prices that offset surging auto sales, government data released Wednesday showed. Stocks have been battered by reports of a softening Chinese economy and uncertainty about when the Federal Reserve will raise interest rates. Retail sales account for a big piece of overall consumer spending.
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Auto sales were strong once again, jumping 1.7% last month, with sales hitting the highest level since 2005. Bloomberg economists had expected a decline of just 0.1%.
Revisions to previous data painted a darker picture of the U.S. economy, with August’s 0.4pc rise in sales nudged down to 0.2pc, and July’s 0.6pc gain amended to 0.5pc. Consumers are spending more on cars and at restaurants, according to the report.
Disappointing United States retail sales have all but closed the door on a possible interest rate rise this year, as concerns over the health of the world economy have grown. The producer price index decreased 0.5 percent, the most since January.
Excluding the jump in auto sales, retail sales fell by 0.3% in September following a revised 0.1% drop in August.
The weak inflation environment is one of the obstacles confronting policymakers who are contemplating raising rates for the first time in almost a decade. The U.S. central bank has kept its short-term interest rate near zero since late 2008.
Firms’ caution in building inventory could be a drag on economic growth in the July-September. Clothing store sales were up 0.9 percent in September, while receipts at building materials and garden equipment stores were down 0.3 percent.
But even excluding volatile autos and gasoline, sales were virtually flat. Sales fell at convenience stores and gas stations, in large part due to a fall in fuel prices; the Commerce Department doesn’t factor in price declines. Clothing and accessories stores, boosted by back-to-school shopping, climbed 0.9%.
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Another report from the Commerce Department showed business inventories were unchanged in August for a second straight month. Sales at electronics and appliance stores slipped 0.2 percent. Online sales also fell last month.
