Retail sales returned another soft reading in September, weighed down by a drastic drop in spending at bars and restaurants. Spending also dropped at grocery stores and gas stations, leading to fears of a possible economic slowdown. Only a jump in spending at auto dealers staved off an overall decline.
However, experts feel that the decline in sales was largely attributable to the impact of Hurricane Florence. Restaurant sales fell but have remained robust over the past year.
Also, core retail sales experienced a healthy increase, indicating that consumer spending remains robust. Investing in auto and parts dealers, the leading gainers for the last month looks prudent at this point.
Sales Remain Soft, Restaurant Sales Plunge
According to the Department of Commerce, retail sales increased by 0.1% during the month of September, below the consensus estimate of a jump of 0.6%. The reading was in line with August’s sluggish increase of 0.1%. Excluding motor vehicles and parts, retail sales decreased by 0.1%.
Sales may have been constrained by the impact of Hurricane Florence. But the soft reading was largely attributable to a 1.8% drop in sales at food services and drinking places. This is the largest decline since December 2016. However, restaurant sales have still increased 7.1% over the past 12 months.
Auto Sales Surge, Spending Remains Robust
As is evident, the headline number would have undergone a decline but for a good month at auto dealers and parts sellers. Sales at motor vehicle and parts dealers increased 0.8% last month. However, sales at gasoline stations declined by 0.8%, indicating that fuel prices had somewhat moderated.
Sales at clothing and accessories stores increased by 0.5%, rebounding from a 2.8% plunge in August. Nonstore retailers experienced a 1.1% increase in sales, reflecting the power of online retail. Building material store sales inched up 0.1%. Sales at musical instrument, hobby and book stores increased 0.7%.