“Retail sales rise only 0.2% in September, auto, apparel, and online sales fall; middle- and lower-income consumers under pressure”
Report by Husneara Choudhury : In September, U.S. retail sales saw very modest growth — just 0.2%, below economists’ forecast of 0.4%.
The “core” retail sales index (excluding autos, gasoline, building materials, and food services) fell 0.1%, indicating pressure on consumer spending and income. Middle- and lower-income consumers, in particular, are cutting back due to inflation and a weakening labor market.
The unemployment rate in September rose to 4.4%, affecting household economic security.
• Auto dealerships: -0.3%
• Apparel retail: -0.7%
• Electronics: -0.5%
• Online retail: -0.7%
Producer Price Index (PPI) increased by 0.3% in September, with a large portion of the rise coming from the energy sector.
Analysts say that although spending growth is slow, third-quarter GDP growth is still expected. However, risks to the economy are rising heading into the fourth quarter.
• The decline in consumer spending ahead of the holiday season signals a weak retail environment.
• The fall in “core” retail sales is a warning sign for the long-term health of the economy.
• Persistent inflation is reducing purchasing power and limiting consumer spending.
• The Federal Reserve may exercise caution in its monetary policy; interest rates and spending policies could be affected.
• Retail sales up only 0.2% (expected 0.4%)
• Core retail sales down 0.1%
• Unemployment rises to 4.4%
• Producer Price Index up 0.3% — major impact from energy sector
• Consumer spending slow; holiday shopping may face constraints
• Consumer spending trends suggest a direct impact on retail sales during the holiday season. Inflation and energy price increases are reducing purchasing power.
• The decline in core retail sales indicates a long-term trend. If this continues, the economy could face challenges in the third and fourth quarters.
