US retail sales fall amid trade tensions

Retail sales dropped in the United States in September for the first time in seven months as shoppers felt less secure amid domestic political turmoil and the fallout from the US-China trade war, according to analysts.

Retail sales, which consist of purchases in stores, restaurants and online, fell 0.3 percent in September following a 0.6 percent gain in August, figures from the Commerce Department showed. It was the largest decline since February, when sales fell 0.5 percent.

Consumers didn’t spend as much on cars and trucks, leading to a 0.9 percent decline in spending in that sector. In August, there had been a 1.9 percent gain.

Shoppers also avoided buying building materials, whose sales fell 0.1 percent, and they cut back on online shopping by 0.3 percent — the biggest decline since December 2018. Sales of electronics, including Apple’s newest iPhone, also failed to give a boost.

Analysts said it was a sign that consumer confidence had dipped, amid an impeachment inquiry into President Donald Trump and uncertainty in the 15-month tit-fortat US-China trade conflict.

“The pullback in September compared with August is possibly a reaction to increased fears over US-China tensions,” said Jack Kleinhenz, chief economist of the National Retail Federation, or NRF, in a statement. “While uncertainty around trade policy and other issues have dampened consumer sentiment recently, consumers still have a lot going for them as evidenced by longer-term trends and factors like the tight labor market.

“September is a tricky month to measure because of seasonal factors like the end of summer and back-to-school spending, and this year’s early Labor Day may have moved up some spending into the last days of August.”

Economists use consumer spending to gauge the health of the economy, as it equates for twothirds of output.

Consumer spending had been strong in the spring. It increased at a 4.6 percent annualized rate in the second quarter — the highest in a year and a half.

Bob Phibbs, CEO of The Retail Doctor, told China Daily: “The trade war with China, and the tariffs and the (Hong Kong) unrest in China have all had an impact. The consumer does not like uncertainty . ... For most consumers these days, auto sales have been tapering off for a while now. Sales of the biggestpriced items are showing that the consumer is nervous, and I don’t think anything looks like a quick fix. Even Brexit and all that stuff they’re doing over there isn’t helping. There is no certainty out there for us.”

Overall, the economy grew at an annual rate of 2 percent from April to June. That came from a 4.6 percent boost in consumer spending.

Spending was expected to slow between July and September but was still expected to help the economy grow at the 2 percent rate seen in the spring, The Washington Post reported.

US gross domestic product grew at a 1.4 percent seasonally adjusted annual pace in the third quarter compared with a 3.1 percent annual rate in the first quarter and 2 percent in the second quarter.

The NRF said that there was still a glimmer of hope. Although retail sales in September were down 0.1 percent seasonally adjusted from August, they were up 4.5 percent unadjusted compared to September 2018. The numbers exclude sales at automobile dealers, gasoline stations and restaurants.

And Phibbs added: “The on-again, off-again nature of our current government is not going to help anyone feel there is a resolution in that respect. It’s interesting that online fell as well.”

He also dismissed any notions that the trend indicated online sales hammering offline sales, saying: “People push back when they are worried. The consumer is starting to realize we are more vulnerable to a lot of ups and downs than we might have hoped.”