Despite consumers’ ongoing economic challenges, retail sales witnessed a surge in September.
Amidst increasing economic challenges such as elevated interest rates and decelerating growth, September’s retail data reveals that consumers have not lost their spending spirit. With the holiday season on the horizon, the National Retail Federation (NRF) anticipates moderate growth to persist. Retailers have been diligently preparing for the festive season, ensuring that consumers can access excellent products, competitive pricing, and convenience.
The current U.S. Census Bureau report demonstrates that households continue to have substantial purchasing power in the face of persistent inflation, rising interest rates, and geopolitical disturbances. Strong payroll growth in the recent past has boosted retail sector spending, but a significant portion of the surge is due to car sales, gasoline prices, and food services. When these categories are excluded to evaluate core retail, as delineated by NRF, the yearly growth rate seems to be tapering off.
In September, data from the U.S. Census Bureau highlighted that overall retail sales marked a 0.7% increment from the previous month and a 3.8% rise year over year. This is in contrast to the 0.8% monthly and 2.9% annual increase observed in August.
Core retail, which excludes automobile dealers, gasoline stations, and restaurants, saw a 0.5% adjusted growth from August to September and a 2.2% unadjusted yearly growth. In August, the monthly growth stood at 0.2%, and the annual increase was 3.6%.
When viewed through a three-month moving average lens, September indicated a 3.1% unadjusted annual growth. For the year’s first three-quarters, the growth rate was 3.7%.
A closer look into various retail categories revealed that September saw yearly growth in five out of nine segments. Health and personal care stores took the lead with a monthly growth of 0.8% and annual growth of 7.3%, and online sales had a monthly growth of 1.1% and a yearly growth of 6.2%. Clothing and accessories experienced a monthly decline of 0.8% and a yearly growth of 0.8%. Sectors showing a reduction in growth include furniture and home furnishings, which remained unchanged for the month with a yearly decline of 6.5%.