US Retail Sales

Mixed Retail Sales Report, but Core Spending Remains Steady 

Spending at bars and restaurants has propelled broader retail sales in recent years, but a retrenchment here in September along with smaller outlays at gas stations weighed on the headline, resulting in a 0.1% pickup.

Auto Sales Helped 

Prior to this morning’s release market participants already knew that September was a good month for manufacturers sales of autos to dealers. The annualized pace of wholesale auto sales hit 17.4 million, which tied March for the fastest clip in 2018.

Dealers were able to move inventory in September as well. Motor vehicle and parts sales jumped 0.8%. Perhaps not coincidentally, that too was the best month since March.

Core Spending Intact 

Bars and restaurants have been outperforming broader retail sales recently. But after four straight monthly gains, this category saw a 1.8% decline. The softness here combined with a 0.8% dip at gas stations help explain the headline miss.

Excluding volatile categories like auto, gas and building materials, control group retail sales actually came in a little better than expected, up 0.5% in September.


After a disappointing slowdown in August, retail sales were expected to rebound in September but rather dramatically missed with headline data rising just 0.1% MoM (against expectations of a 0.6% rise).

However, while the “control group” beat expectations – rising 0.5% MoM (vs +0.4% exp), retail sales ex-Autos retail sales actually dropped in September by 0.1%, the biggest drop since May 2017

Under the hood, 10 segments saw higher sales, 3 were lower

Gas station spending dropped (likely price related), health and personal care stores also weakened, but the biggest drop was for restaurants spending, down 1.8% – the most since 2016 (which is being blamed on the Hurricanes)… shopping and consumer activities such as restaurant visits may have been affected in North Carolina and South Carolina in the aftermath of Florence, which made landfall on Sept. 14. At the same time, past experience indicates any negative fallout tends to be temporary and reverses in subsequent months.

and to that print….


-R.W.N II, yours in 322.

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