Car-buying fuels bump in September retail sales
Retail sales rose just 0.1 percent last month, after being unchanged in August, the Commerce Department said Wednesday. Cheaper gasoline prices suppressed overall retail sales growth.
Americans increased their spending at auto dealers, restaurants and clothiers in September, but cheaper gasoline prices suppressed overall retail sales growth.
Retail sales rose just 0.1 percent last month, after being unchanged in August, the Commerce Department said Wednesday. Over the past 12 months, sales have climbed 2.4 percent.
Auto purchases shot up 1.8 percent last month, while spending at restaurants advanced 0.7 percent and shopping at clothiers improved 0.9 percent.
More Americans are buying cars and dining out as the U.S. economy has entered its seventh straight year of expansion. Spending increased amid a surge in hiring - 2.8 million jobs in the past year - that has since slowed in recent months. The slowdown, caused largely by global pressures, has raised questions about whether retail sales and consumer demand can sustain economic growth in the coming months.
Auto dealers enjoyed a busy September. The industry said it sold 1.44 million cars and light trucks last month, up 15.8 percent from a year ago. Buyers took advantage of low rates for auto loans and incentives over the Labor Day weekend to unload cars before the new model-year vehicles arrive at dealerships.
More Americans are also heading to restaurants and bars. Sales at dining establishments have climbed 8.2 percent this year. Restaurants and bars account for almost 13 percent of all hiring in the last 12 months.
Yet overall retail sales have been muted for much of this year.
Spending at gasoline stations plunged 3.2 percent in September because of lower energy prices. Sales at service stations have dived 19.7 percent from a year ago as drivers no longer need to spend as much on gas.
Prices at the pump have fallen nearly 28 percent over the past year to $2.31 a gallon, according to AAA.
Analysis by the JPMorgan Chase Institute suggests that consumers spent 80 cents of every dollar saved, with the largest shares going to restaurants and grocery stores.
Purchases at building supply stores also fell for the second straight month in September, potentially suggesting that housingsales might retreat from the summer's frantic sales pace.
Economists watch the retail sales report closely because it provides the first indication each month of the willingness of Americans to spend. Consumer spending drives 70 percent of the economy. Yet retail sales account for only about one-third of spending, with services such as haircuts and Internet access making up the other two-thirds.