- U.S. retail sales rise 1.9 percent in September, beating projections
- Retail sales of cars and clothing see major boosts, though appliance and electronics sales decline
- Sales boost seen as a reflection of economic recovery, though economists unsure if momentum can be sustained during ongoing uncertainties
Retails sales in the United States saw a healthy boost in September, rising 1.9 percent from August – nearly three times higher than forecasts offered by economists who were polled by Dow Jones.. Economists said that while the figure reflects an ongoing recovery from the COVID-19 pandemic, they were uncertain if the momentum can be sustained.
Auto sales, which account for about one-fifth of retail spending and can often exaggerate retail spending increases or decreases, rose 3.6 percent. With this figure taken out, retail sales were still up 1.5 percent from the previous month. Clothing sales also saw a considerable increase as people did back-to-school shopping or updated their wardrobes for colder weather. Appliance and electronics sales were the only areas where retail spending decreased.
The news helped drive market gains on Friday morning, though economists were uncertain if strong retail sales growth will continue in the near future. Headwinds include elevated jobless claims as numerous companies announce layoffs, a resurgence in COVID-19 cases that could trigger new lockdowns, weaker restaurant sales as outdoor dining options become more difficult in colder weathers, and the ongoing impasse over new federal stimulus.
The holiday shopping season could also be a key driver for retail performance at the end of 2020. Many consumers have started their shopping early, and holiday spending is expected to increase since many households increased their savings or have more cash available due to canceled vacations and other expense reductions during the pandemic. However, millions of other households are likely to reign in their holiday expenditures due to layoffs or concerns that they will lose their job.
