Consumer spending growth softened last month, according to a new report from the U.S. Census Bureau. Specifically, advance estimates of retail and food services sales in September totaled $509.0 billion, a 0.1 percent increase from August’s downward-revised print and significantly worse than the 0.6 percent gain economists anticipated. However, retail sales still rose for the 8th month in a row, and most of the weakness was due to a 1.8 percent drop in food-services purchases.
That was the biggest monthly decline in spending at restaurants and bars since 2016 but it might have been just a temporary setback related to hurricane Florence. Moreover, other retail categories saw broad gains in September, including the so called “control-group” that is used in the calculation of U.S. gross domestic product (GDP). This sales measure lifted by 0.5 percent in September, better than expected. Faster wage growth, though, will likely still be needed to sustain consumer spending going forward, especially since personal saving and revolving credit (credit card) use have been trending lower recently.
Sources: Econoday, U.S. Census Bureau, ZH, Bloomberg, UoM
Post author: Charles Couch