(Excluding Cars, Clothes) September Retail Sales Edged Up

In What's New, Industry News by Jeff Prine

Apparel ShoppingWashington—Except for drops in sales of automobiles—and clothing and accessories, retail sales in September edged up, though not as much as economists hoped.

In a monthly sales report that was delayed due to government shutdown, the U.S. Department of Commerce reported today that total sales were down 0.1% to $425.9 billion. (That reflected a 2.2% drop in motor vehicle and parts sales).

Excluding sales of cars and gasoline, however, sales inched up 0.4%, just missing the 0.5% increase analysts expected.

“The weakness in the headline retail sales figure is largely a function of the sharp drop in auto sales, which fell 5.1% to 15.4 million in August,” noted Bank of America Merrill Lynch. ”

The National Retail Federation (NRF)’s figures, which exclude automobiles, gas stations and restaurants, showed a 0.6% seasonally adjusted from last month, and 3.8% unadjusted year-over-year.

Shutdown to Sour October Sales?

“Retailers witnessed a solid sales performance in September, with marked gains in all sectors, excluding clothing,” NRF President and CEO Matthew Shay said. “The American consumer remains ever-cautious and value-driven but continues to spend. Only time will tell if and when the government shutdown and debt ceiling debacle will impact retailers and consumers this fall and winter. The true economic impact of Washington’s inability to enact policies that enhance and sustain economic growth and certainty remains to be seen.”

Of the nine major categories, clothing and accessories posted a decline, falling 0.5%. Though it was still up 2.7% compared with September 2012.

Department stores were off 0.9% along with a 1.2% drop in sales at “miscellaneous store retailers.”

Economists said a 0.7% increase at electronics retail was due in part to the launch of Apple’s iPhone 5S and 5C.

The unimpressive September results can be blamed in part on fears related to the government shutdown, which lasted for more than two weeks in October.

“Falling gas prices combined with rising housing and stock prices continue to support consumer spending, and the broader economy,” NRF Chief Economist Jack Kleinhenz said. “While far from robust, consumers are shopping, but they are spending both discriminately and moderately. Volatility still persists in various retail sectors but spending has somewhat stabilized heading into the all-important holiday shopping season.”

So-called core sales, which correspond most closely with consumer spending portion of the gross domestic product, are expected to suffer in October due to the budget crisis. “This report points to continued resiliency in U.S. consumer spending activity,” said Millan Mulraine, an economist at TD Securities. “However, given the drag on confidence from the government shutdown and protracted debt ceiling fight earlier this month, this resiliency is expected to be tested.”

 

Get Ready: ShopperTrak Predicts 10 Busiest Days This Holiday
Sears Holdings Mulls Lands' End Spin-Off