Saturday, 13 October 2007

September Retail sales get boost from autos & gas

U.S. retail sales increased 0.6% in September, double that expected by economists driven mainly by strong sales of gasoline, automobiles and food.

Higher energy prices saw gasoline sales rising 2%, coupled with a surprising 1.2% gain in motor vehicle sales provided the bulk of the increase. Excluding gas and cars, sales rose just 0.2%.

As usual the devil is in the detail:

  • Retail sales at general merchandise stores fell 0.1%, including a 0.5% drop at department stores. Sales at clothing stores dropped 0.4%.
  • Sales at furniture stores fell 0.6%, reflecting the slump in home sales. However sales at electronics and appliance stores, rose 0.9%.
  • Sales at building materials and garden stores nudged 0.1% higher.
  • Sales at grocery stores rose 0.8%, recovering after a rare decline in August. September's sales at restaurants and bars were flat.
  • Sales at health and personal-care stores rose 1%.
  • Sales at leisure-time activity stores, such as music, books and sporting goods, fell 0.7%.
  • Sales at nonstore retailers, such as catalogs and online stores, rose 1.1%.

Comments from legion of economists:

"The increase in car and truck sales will add to growth, but the rest of retail sales seems to have been flat on the month in real terms," Robert Brusca, chief economist for FAO Economics.

"Sales show a moderately healthy trend for consumer demand, which is impressive in light of the shocks permeating through the financial markets," Stephen Gallagher, economist for Societe Generale

"The real September story is the slowdown in core retail sales," Richard Moody, chief economist for Mission Residential.

Interestingly automakers reported that unit sales were down in September. It's doubtful they increased prices as there were plenty of stories of discounting flying around. Regardless, you'd have to say the US consumer is still hanging in there.