US retail sales rise 1.9%, most in three months
But economic rebound is threatened as virus surges
U.S. retail sales rose in September at the fastest pace in three months, topping forecasts and capping a third-quarter rebound for consumer spending that faces increasing headwinds.
The value of overall sales increased 1.9% from the prior month after a 0.6% gain in August, Commerce Department figures showed Friday. The median estimate in a Bloomberg survey of economists called for a 0.8% gain. Excluding autos and gasoline, sales rose 1.5%.
The broad-based gain may partly reflect consumers tapping elevated savings, with demand supported by temporary extra jobless benefits and continued hiring. The economy’s rebound from the pandemic’s downturn is threatened, though, by an acceleration in coronavirus infections and Congress’s failure to agree on a fresh stimulus package, developments that weigh on an already-slowing labor market recovery.
While the $600 weekly payments for jobless Americans expired in July, a temporary program authorized by President Donald Trump provided most benefit recipients $300 extra a week. But funding for that program is dwindling, and the dropoff in payments risks a hit to future consumer spending.
All but one of the 13 major categories increased in September, led by clothing, sporting goods and motor vehicles. The only sectors to decline were electronics and appliance stores.
So-called control group sales, which some economists see as a more reliable gauge of underlying demand, rose 1.4% from the prior month, also exceeding forecasts. That figure excludes food services, car dealers, buildingmaterials stores and gasoline stations.
With the pandemic has also come a shift in consumption patterns. Total retail sales have surpassed their February level but several industries — including restaurants, clothing and electronics and appliance stores — remain below year-earlier levels. Instead, consumers are spending more at grocery stores, online vendors and building material retailers.
Excluding automobiles, retail sales rose 1.5%, following 0.5% in August.
While consumer goods spending on the whole has rebounded to a new high, total outlays, which include both goods and services, lag behind February levels. The Commerce Department will release the September figures for personal spending on Oct. 30.