September Sales Surge: US Retail Growth Doubles Expectations

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U.S. retail sales for the month of September outpaced expectations, highlighting the resilience of American consumers even amid concerns about a slowing economy.

September saw a 0.7% increase in retail sales, significantly surpassing Wall Street's projected 0.3% gain. When excluding car and gasoline sales, the rise was even more substantial at 0.6%, outperforming Bloomberg's estimate of 0.1%. Aside from that, August's sales figures received an upward revision, climbing to 0.8% from the initially reported 0.6%.

The September rebound in retail sales arrives amid mounting challenges for consumers, including tighter credit conditions, surging gasoline prices that hit 2023's peaks late in the summer, and the resumption of student loan payments.

Economists suggest that while these factors could potentially slow down spending growth in the coming months, there's also a possibility that the contraction in spending might be avoided entirely.

The retail sales report reveals that nine out of 13 retail sales categories experienced month-over-month growth, with the only exception being the sporting goods category, which remained steady at August levels. Sales at various retail stores surged by 3% compared to August, and sales at retailers excluding stores saw a 1.1% increase, while sales at car and car parts dealers rose by 1% from the previous month.

Sales at electronics and appliance stores, as well as apparel sales, experienced a dip with a 0.8% decline from the previous month.

Sustaining steady consumer spending is seen as a pivotal element in warding off a potential recession in the United States in 2023. That being said, some banks are sounding a note of caution about a possible slowdown in the future.

JPMorgan CEO Jamie Dimon noted that consumers and businesses are currently maintaining stability but are gradually depleting their financial reserves.

Bank of America CEO Brian Moynihan described the U.S. economy as one where consumer spending remains above last year's levels but is showing signs of deceleration.