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US retail sales blow expectations in Sept

Published : Monday, 19 October, 2020 at 12:00 AM  Count : 129

US retail sales blow expectations in Sept

US retail sales blow expectations in Sept

WASHINGTON, Oct 18: US retail sales accelerated in September, rounding out a strong quarter of economic activity, but the recovery from the COVID-19 recession is at a crossroads as government money runs out and companies continue to layoff workers.
New coronavirus cases are also surging across the country, which could lead to restrictions on businesses like restaurants, gyms and bars, and undercut consumer spending. The economy is already shifting into lower gear. Other data on Friday showed an unexpected drop in output at factories last month.
"Although sales growth is strong, it will slow through the rest of this year and into next year," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. "The slowing will be even larger if Congress does not pass another stimulus bill. Unemployment remains pervasive throughout the US economy."
Retail sales jumped 1.9per cent last month as consumers bought motor vehicles and clothing, dined out and splashed out on hobbies. That followed an unrevised 0.6per cent increase in August.
Economists polled by Reuters had forecast retail sales would rise 0.7per cent in September. Some said September's surge was likely exaggerated by difficulties stripping seasonal fluctuations from the data after the shock caused by COVID-19. Unadjusted retail sales fell 2.8per cent after dropping 1.0per cent in August.
Retail sales have bounced back above their February level, with the pandemic boosting demand for goods that complement life at home, including furniture and electronics. An aversion to public transportation has boosted motor vehicle purchases. Retail sales rose 5.4per cent on a year-on-year basis in September.
They account for the goods component of consumer spending, with services such as healthcare, education, travel and hotel accommodation making up the other portion.
Excluding automobiles, gasoline, building materials and food services, sales increased 1.4per cent last month after a downwardly revised 0.3per cent drop in August.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have dipped 0.1per cent in August.   -Reuters














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