U.S. Retail Sales Rise 0.2% In September, Less Than Expected

(RTTNews) - Retail sales in the U.S. increased by less than expected in the month of September, according to a long-delayed reported released by the Commerce Department on Tuesday.

The Commerce Department said retail sales rose by 0.2 percent in September after climbing by 0.6 percent in August. Economists had expected retail sales to rise by 0.4 percent.

"Even though retail sales rose a touch less than expected in September, that followed a string of strong monthly gains that we think leaves real consumer spending on track for a gain of 3.2% annualized in Q3," said Michael Pearce, Deputy Chief US Economist at Oxford Economics.

He added, "The expiry of the electric vehicle tax credit will weigh on spending in Q4, but underlying consumer spending still has plenty of momentum heading into the holiday season."

The weaker than expected retail sales growth partly reflected a pullback in sales by motor vehicles and parts dealers, which fell by 0.3 percent in September following a 0.6 percent increase in August.

Excluding the dip in auto sales, retail sales increased by 0.3 percent in September after advancing by 0.6 percent in August. Ex-auto sales were expected to grow by 0.4 percent.

The report showed a substantial rebound in sales by miscellaneous store retailers, which spiked by 2.9 percent in September after plunging by 2.9 percent in August.

Sales by gas stations also shot up by 2.0 percent during the month, while sales by health and personal care stores jumped by 1.1 percent.

On the other hand, the report showed a 2.5 percent slump in sales by sporting goods, hobby, musical instrument and book stores. Sales by non-store retailers also slid by 0.7 percent.

Pearce said the decrease in sales by non-store retailers is "likely a seasonal adjustment issue linked to the timing of sales by major online retailers."

The Commerce Department also said core retail sales, which exclude automobiles, gasoline, building materials and food services, edged down by 0.1 percent in September after climbing by 0.6 percent in August.