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Economy in Brief

U.S. Retail Sales Post Surprising Increase During September
by Tom Moeller  October 16, 2020

• Consumer spending improves broadly.

Consumer spending was notably firm last month, rising for the fifth consecutive month, despite limited store openings due to COVID-19. Total retail sales, including food service & drinking establishments, increased 1.9% (5.4% y/y) during September following an unrevised 0.6% August rise. July's 1.1% gain was revised from 0.9%. A 0.7% increase had been expected in the Action Economics Forecast Survey. Retail sales excluding motor vehicles & parts improved 1.5% last month after increasing 0.5% in August, revised from 0.7%. July's increase was revised to 1.6% from 1.3%. A 0.4% gain had been anticipated. In the retail control group, which excludes autos, gas stations, building materials & food services, sales rose 1.4% (9.1% y/y) after easing 0.3% in August and rising 1.2% in July. Retail sales excluding restaurants rose 1.9% last month (8.2% y/y) after improving 0.2% in August.

Sales of motor vehicle & parts dealerships strengthened 3.6% (10.9% y/y) in September compared to a 7.5% rise in unit vehicle sales reported earlier this month. It followed a 0.7% rise in August which came after a 0.6% July decline. Gasoline & service station sales improved 1.5% (-13.3% y/y), even though seasonally adjusted prices eased 3.0% m/m. Building materials & garden store sales rose 0.6% (19.1% y/y) after improving 2.4% in August.

Apparel & accessory store sales surged 11.0% (-12.5% y/y) after improving 1.4% in August. General merchandise stores sales strengthened 1.8% (4.3% y/y) after easing 0.4% in August. Department store sales jumped 9.7% (-7.3% y/y) and reversed August's 2.2% decline. Sales of nonstore retailers improved 0.5% (23.8% y/y) as shopping from home became less prevalent. Furniture & home furnishing store sales edged 0.5% higher (4.6% y/y) following two straight 2.1% increases. Sporting goods, hobby, book & music store sales jumped 5.7% (14.4% y/y) following two months of sharp decline. Electronics & appliance store sales fell 1.6% (-6.4% y/y) after a 0.4% gain.

Grocery & beverage store sales held steady last month (10.5% y/y) after falling 1.4% in August. In another nondiscretionary category, health & personal care products sales rose 1.7% (5.3% y/y) after a 0.5% dip.

Eating out remained relatively strong as restaurant and drinking establishment sales rose 2.1% last month (-14.4% y/y), the smallest of four straight months of strong growth.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

Assessing Recent Stock Market Valuation with Macro Data from the Federal Reserve Bank of San Francisco is available here.

Retail Spending (% chg) Sep Aug Jul Sep Y/Y 2019 2018 2017
Total Retail Sales & Food Services 1.9 0.6 1.1 5.4 3.5 4.4 4.7
  Excluding Autos 1.5 0.5 1.6 4.0 3.5 5.2 5.0
Retail Sales 1.9 0.2 0.8 8.2 3.4 4.2 4.6
 Retail Less Autos 1.4 0.0 1.2 7.4 3.3 5.1 4.9
  Motor Vehicle & Parts 3.6 0.7 -0.6 10.9 3.8 1.4 3.4
  Food & Beverage Stores 0.0 -1.4 0.3 10.5 2.5 2.9 4.1
  Gasoline Service Stations 1.5 0.9 4.5 -13.3 -0.6 9.3 9.4
Food Service & Drinking Places 2.1 4.3 4.2 -14.4 4.6 5.8 5.7
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