September was a prosperous month for US retail, as sales increased by 0.4%, exceeding economists' predictions of a slowdown, per Census Bureau data. The total sales reached $714.4 billion, showcasing the consumers' willingness to spend. Economists observed a rise in 'core' spending which excludes sales at gas stations and auto dealerships. This metric increased by 0.7% from the previous month.
Wells Fargo economists Tim Quinlan and Shannon Seery Grein noted that in spite of concerns about consumer financial health and a potential weakening labor market, US retailers experienced a productive September. The robust results might contribute to a more robust than expected growth in the third quarter of the U.S. Gross Domestic Product (GDP).
The retail sales report of September indicates that US consumers are continuing to wield impressive spending power in a more specific manner, observed Scott Anderson, Chief U.S. Economist for BMO Capital Markets.
Leading the charge were 'nonstore retailers'-primarily online platforms like Amazon and traditional catalog services-that noted a 7.1% increase in sales compared to the same period last year. Other sectors that saw improved sales include restaurants and bars, apparel stores, and health and beauty stores. Conversely, furniture sales declined by 2.3% amidst a slowdown in homebuying due to high interest rates.
National Retail Foundation expects this growing retail trend to persist in the anticipating holiday shopping season.