Falling short of economists’ expectations, retail store and restaurant sales grew by only 0.1 percent from August to September to reach a seasonally adjusted figure of $509 billion. By contrast, economists have predicted a month-over-month rise of 0.7 percent, The Wall Street Journal reported.
At the same time, department store sales dropped by 0.8 percent. But sales at non-store retailers, including mail order catalogs and eCommerce sites, rose by 1.1 percent. Sales at gas stations dropped by 0.8 percent, but they were higher by 11.4 percent than one year before.
In terms of possible economic factors for the changes, Hurricane Florence reached North Carolina in September. But a spokesperson for the Commerce Department said the report could not quantify the storm’s impact. And while the second quarter saw strong consumer spending, that might have weakened around the time of the end of the third quarter, as suggested by the results of the report.
The news comes as data released in late September showed that U.S. consumer spending grew in August by 30 basis points, as estimated by the Commerce Department. Inflation continued to hold at the 2 percent target rate as held by the Federal Reserve, CNBC reported on Sept. 28. The reported gains matched expectations by economists coming into the report.
As has been widely reported, and as recounted by the site, consumer spending accounts for roughly two thirds of economic activity in the United States. The 30 basis point gain seen last month comes on top of a 40 basis point gain in July. In reference to what was beneath the last month’s gain, healthcare expenditures helped offset a decline in consumers’ purchases of motor vehicles.
Broken down a bit, consumer spending on goods was up 30 basis points, where a tailwind came from higher gas prices. Spending on services rose by 40 basis points, which includes the aforementioned healthcare spending. When the headline numbers were adjusted for inflation, consumer spending was up 20 basis points, and the previous month’s consumer spending tally came to 30 basis points.