Economic Report: U.S. retail sales snap 6-month win streak in September as receipts fall 0.3%
The numbers: Sales at U.S. retailers fell in September for the first time in seven months as most stores posted lower receipts, signaling that a widely expected slowdown in consumer spending is under way.
Retail sales fell 0.3% last month, the government said Thursday, ending a streak of six straight strong gains that helped to fuel economic growth in the middle of the year.
Economists polled by MarketWatch had expected a 0.3% increase.
Retail sales were flat if gasoline and auto dealer receipts are excluded, but the overall report was still quite weak.
Partly mitigating the soft September report: Retail sales in August were raised to a 0.6% increase from an original 0.4% reading.
What happened: Sales fell almost 1% at auto dealers even though they reported a strong increase in the number of new vehicles sold. The drop-off likely reflects end-of-summer discounting and more corporate-fleet sales.
Sales also declined 0.7% at gas stations, reflecting lower prices at the pump. Autos and gas represent a large portion of overall retail sales.
The softness was widespread. Sales also fell at home centers, department stores and internet retailers.
The only segment of the retail industry to record strong sales were health stores and pharmacies.
What might have contributed to weaker sales is the monthlong strike at General Motors
that has idled tens of thousands of workers in several large Midwestern states such as Michigan and Ohio. The strike is expected to end soon, perhaps as early as this week.
Big picture: Household spending is keeping the wheels of the U.S. economy turning even as many countries around the world confront slower growth, but the torrid pace of retail sales during the spring and summer was unlikely to persist.
The big question is how much consumer spending wanes, especially with businesses largely sitting on the sidelines. The trade war between the U.S. and China has disrupted global supply chains, upset business-investment plans and caused executives to hunker down until the dispute is resolved.
So long as consumers do their part, the U.S. is likely to avoid recession. The Federal Reserve’s decision to cut interest rates also appears to have given parts of the economy like the housing industry a boost.