US retail sales rise more than expected in September

17th Oct 2024 14:27

(Sharecast News) - US retail sales rose more than expected in September, according to fresh data released on Thursday, driven by a broad-based increase across several sectors.

According to the Commerce Department, the value of retail purchases grew by 0.4%, following a modest 0.1% increase in August.

Excluding sales at auto dealerships and gasoline stations, retail sales advanced by an even stronger 0.7%.

Out of 13 major retail categories, 10 saw gains, with notable increases in sectors such as miscellaneous retailers, as well as apparel and grocery stores.

Gasoline stations experienced a decline in sales, reflecting lower fuel prices, while auto sales showed minimal growth.

A key measure of retail activity, known as control-group sales - which feeds into the government's GDP calculations - rose by 0.7% in September, marking its strongest gain in three months.

The measure excludes volatile categories like food services, autos, building materials, and gasoline stations.

Over the last three months, control-group sales had grown at an annualised rate of 6.4% - the highest since early 2023.

"The rise in headline retail sales in September was driven by another strong increase in underlying control group sales and leaves real consumption on track for growth of 3.2% annualised in the third quarter - slightly above our baseline forecast," said Michael Pearce, deputy chief US economist at Oxford Economics.

"A resilient labour market, the strong state of households' balance sheets, and declining interest rates mean we expect consumption growth to remain close to 3% in the coming year."

Pearce described the details of the report as "encouraging", with spending on food services and a range of retailers contributing.

"The impact of Hurricanes Helene and Milton, together with sales events at online retailers Amazon and Walmart will make the October report particularly noisy.

"However, the underlying trend in consumer spending remains strong."

Reporting by Josh White for Sharecast.com.