As expected, auto sales and gasoline sales tugged down on retail sales in September. But core numbers were weaker than expected. Retail sales in September declined 0.3 percent after jumping 0.6 percent in August. Analysts forecast a 0.1 percent dip for September. Excluding autos, sales slipped 0.2 percent after gaining 0.3 percent in August. Expectations were for a 0.3 percent increase. Excluding both autos and gasoline sales dipped 0.1 percent, following a jump of 0.5 percent in August. Expectations were for 0.5 percent.
Within the core, softness was seen in declines furniture & home furnishings, building materials, nonstore retailers, clothing & accessories, and sporting goods & hobbies. Gains were posted for electronics & appliances (likely iPhones), health & personal care, general merchandise, and food services & drinking places.
Today's report is very mixed. It was not surprising that a downswing in autos after a strong August pulled down sales. And the same was expected for gasoline prices pulling down sales. But core sales eased despite a surge in electronics sales. Core sales eased after a very strong August. On a very positive note, food services & drinking places gained a robust 0.6 percent, matching the pace for August. This is a very discretionary component, suggesting that the consumer is still spending.
Later in the trading day, equities focused on the negative aspects-notably the headline numbers for retail sales and a sharp deceleration in Empire State. Also, markets continue to worry about slowing growth overseas. All combined led to a sharp sell off in equities. While the retail sales report is disappointing in some headline numbers, some details suggest seeing if the positive aspects carry over to October data for the consumer. Also later this month, we get to see the adjustment for lower gasoline prices in the personal income report with data on chain-dollar personal spending. For retail sales and personal spending with August strong and September easing, an average likely is the proper focus.
Retail sales jumped 0.6 percent in August after a rise of 0.3 percent the month before. The July upward revision was significant-the previous estimate was zero. Excluding autos, sales gained 0.3 percent in both August and July. Excluding both autos and gasoline sales were quite healthy, increasing 0.5 percent, following a rise of 0.3 percent in July.