Retail sales rose 0.7% last month, the Commerce Department said on Friday.

Retail sales in the United States unexpectedly rose in September, boosted in part by increased revenue at auto dealerships due to rising motor vehicle prices, but supply constraints are feared. disrupt the holiday shopping season amid continued shortages of goods.

Retail sales rose 0.7% last month, the Commerce Department said on Friday. Data for August has been revised upwards to show that retail sales rose 0.9% instead of 0.7% as previously reported. Sales last month were partly boosted by higher prices, as inflation rose sharply in September.

Economists polled by Reuters predicted retail sales would fall 0.2%. A continuing global shortage of microchips is forcing automakers to cut production, leading to a shortage of inventory in showrooms, raising prices and limiting choice for buyers. Other goods are also scarce due to port congestion due to a labor shortage.

“The strong retail sales report reflects both consumer resilience and escalating prices,” said Sal Guatieri, senior economist at BMO Capital Markets in Toronto. “The main concern now is that supply chain disruptions and microchip shortages appear to be spreading, limiting selection and dampening demand for commodities. “

US President Joe Biden announced on Wednesday https://www.reuters.com/world/us/biden-cite-progress-unsnarling-supply-chain-meeting-with-labor-industry-2021-10-13 that the port from Los Angeles would join the port of Long Beach, two of the country’s busiest, to expand its 24-hour operations to unload around 500,000 containers onto offshore freighters.

Spending has shifted to goods and services during the COVID-19 pandemic, straining supply chains. Rotation to services, such as travel and restaurants, has been slowed by a resurgence of coronavirus infections over the summer, driven by the Delta variant.

Retail sales are mainly made up of goods, with services including healthcare, education, travel and hotel accommodation making up the remaining portion of consumer spending. Restaurants and bars are the only category of services in the retail sales report.

INCREASE IN AUTOMATIC RECEIPTS

In September, auto dealer sales rose a surprisingly 0.5% after declining 3.3% in August. With unit sales declining, the increase in revenue likely reflected higher prices amid severe shortages. The average price of a new motor vehicle exceeded $ 45,000 for the first time in September, according to a report released this week by Kelley Blue Book, a vehicle valuation and automotive research company in California.

Online retail sales rose 0.6% after rebounding 5.7% in August. Clothing store sales jumped 1.1%. More workers have returned to the office after the Labor Day vacation and may have needed a new wardrobe after more than a year of working from home due to the pandemic.

Receipts at building supply stores increased 0.1% and those at furniture stores 0.2%. Receipts at sporting goods, hobby, musical instrument and book stores also increased. With the decline in coronavirus infections, the flow of traffic to restaurants and bars increased, increasing sales by 0.3%.

But sales at electronics and appliance stores fell 0.9%.

Excluding autos, gasoline, building materials and food services, retail sales rose 0.8% last month after rising 2.6% revised upward in August. These so-called basic retail sales correspond most closely to the consumer expenditure component of gross domestic product. They were previously estimated to have jumped 2.5% in August.

Economists estimate that consumer spending, which accounts for more than two-thirds of US economic activity, nearly stagnated in the third quarter after a strong annualized growth rate of 12.0% over the April-June period. Consumer spending growth estimates for the third quarter are around 2.0%.

Weak consumer spending also suggests that GDP growth slowed sharply in the July-September quarter from the 6.7% pace in the second quarter. The Atlanta Federal Reserve predicts that the economy grew at a rate of 1.3% in the last quarter.

The government will release its snapshot of third quarter GDP growth at the end of this month. Part of the expected slowdown in growth reflects the declining stimulus to trillion dollars in pandemic relief from the government.

With sizable savings and a tight labor market boosting wages, the fundamentals of the economy and consumer spending are strong. The savings rate rose 10.5% in the second quarter. There were 10.4 million vacancies at the end of August.

“Of course, strong job gains and a high savings rate should provide consumers with an arsenal of funds available for spending after what appears to be a third-quarter hiatus as the Delta variant spreads and payments. fiscal economic impact have faded, ”said Kevin Cummins. , Chief US Economist at NatWest Markets in Stamford, Connecticut.

Read also :

Global equity markets rallied this week as fears of a stagflationary economy were dampened by expectations for corporate profits in the United States.


Source link