WASHINGTON – American buyers withdrew their spending in September, signaling that the US economy could receive important support this year in the face of a more general slowdown in the global economy.
Retail sales – a measure of purchases in stores, restaurants and the Internet – declined by a seasonally-adjusted 0.3% mom in September from month-on-month, the first monthly decline since February, the Commerce Department said Wednesday. Excluding vehicles and gasoline, categories that may be volatile, retail sales remained flat in September.
Wednesday's report indicated that consumer spending is less robust amid concerns that trade tensions are weighing on the global economy and dampening consumer outlook. Consumer spending is the main driver of the US economy, accounting for more than two-thirds of economic output.
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"This morning's report forces eternal optimists to face the possibility that household spending will weaken along with a decline in fundamentals."
Stifel chief economist, wrote in a note to the customers.
The decline in retail sales in September was partly due to a 0.9% decrease in vehicle expenses, which is attributable to a decline following a strong 1
Some economists said the decline in vehicle and gasoline sales showed a more mixed picture than the decline in retail sales would suggest.
Lower gas prices are not negative for consumers. That's actually positive, "said
Chief Economist at Nationwide.
He noted that unit sales in September increased, based on figures from Autodata, as opposed to the drop in US car sales reflected in Wednesday's report.
Non-retail retailer sales, an indicator of online retail sales, declined 0.3% in September, the first drop since December 2018, which was rated as rare by Mr. Berson.
He said he has "seen much more than a month of data, especially a month of data showing all these anomalies," before becoming overly concerned about a slowdown in consumer spending.
Consumers have been boosted by a half-century low unemployment rate and a moderate increase in prices despite a recent US-China trade war that has recently shown signs of easing. The National Association of Home Builders announced on Wednesday that the real estate market index rose three points to 71 in October (from 68 in September), reflecting increased US investor confidence by the month and the broader trend in This year has shown steady growth. They rose by a revised 0.6% in August, more than previously thought. Sales increased by 1.5% from July to September compared to the previous three months.
However, the decline in retail sales in September was followed by recent data suggesting that uncertainty in the trading environment is affecting other parts of the global economy. Personal spending – a separate measure of US consumer spending – slowed more sharply in August than expected. Manufacturing and services activities in the US and Eurozone have also slowed.
Macroeconomic Advisers predicted that seasonally adjusted US gross domestic product (GDP) grew by 1.3% in the third quarter, compared to 2.0% in the second quarter and 3.1% in the first quarter.
Trey Kraus, owner and president of Carlton's men's and women's clothing in Rehoboth Beach, Del., Said he had raised prices for almost all items in his shop because US tariffs had been levied on Chinese imports. The business has high quality clothing, and Mr. Kraus said the higher prices prevented some of his customers from buying multiple items at the same time.
"Even if our business grows year on year without the [price] increase, I would do so. I expected a five to ten percent higher volume than expected," said Kraus.
Nonetheless, he described the business's pedestrian traffic as strong and said he had optimistic prospects for the first quarter of 2020.  "I believe consumer confidence is still high, despite the many messages there are," he said , "I do not know what the statistics say, but that's what I experience."
Write to Amara Omeokwe at [email protected]
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