US consumers keep spending in September, retail sales above consensus
Oct 19, 2020 - 06:09 AM
WASHINGTON — Spending on clothing, cars and sporting goods pushed US retail sales above expectations in September, government data said Friday, indicating consumers were still buying even without more government aid.
Retail sales last month rose to $549.3 billion, seasonally adjusted, an increase of 1.9 percent from August when sales grew 0.6 percent, according to the Commerce Department data.
The month-on-month increase was more than triple expectations and also 5.4 percent higher than the same month in 2019 despite the severe economic downturn caused this year by the coronavirus pandemic.
Retail sales were among the first sectors to recover from the downturn thanks in part to around $3 trillion in government stimulus spending that included expanded unemployment benefits, which boosted consumption and savings despite mass layoffs.
But those provisions have expired and lawmakers have been unable to agree for months on another measure that could restore the support, raising fears Americans wary of economic conditions will stop spending.
The latest data show consumers continued to spend for now, with sales at clothing and accessories stores shooting up 11 percent, sporting goods and hobby purchases growing 5.7 percent and motor vehicle and parts dealers seeing sales rise 3.6 percent.
Food services and drinking places, which were among the sectors hardest-hit by business shutdowns to stop the spread of the virus, rose 2.1 percent.
However there were still plenty of signs of the downturn’s effects in the data, with sales in many individual sectors much lower than they were in the same month last year.
Despite the sharp rebound, clothing sales were 12.5 percent below September 2019, food and drinking places 14.4 percent lower and gas stations down 13.3 percent amid low oil prices globally.
Sales at non-store retailers, such as the e-commerce sites consumers relied to avoid the virus, were up 23.8 percent year-on-year.
“The boom in retail sales continues with new highs in a September surge,” said Charlie Bilello of Compound Capital Advisors on Twitter. “Lesson: if you give the American consumer free money, they will spend it.”
But Gregory Daco of Oxford Economics warned it could be the “last consumer hurrah as the summer winds down” and savings buffers are tapped out.