U.S. retail sales fell for the first time in seven months in September, suggesting that manufacturing-led weakness could be spreading to the broader economy, keeping the door open for the Federal Reserve to cut interest rates again later this month.
Retail sales dropped 0.3% last month as households cut back spending on motor vehicles, building materials, hobbies and online purchases. That was the first drop since February.
The signs of a deceleration in consumer spending reported by the Commerce Department came on the heels of reports this month showing a moderation in job growth and services sector activity in September.
“Weaker retail numbers provide further evidence that weakness in the manufacturing sector is spilling over into other areas of the economy,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared to September last year, retail sales increased 4.1%.
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after advancing by an unrevised 0.3% in August. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Meeta develops credible content about various markets based on deep research, opinions from experts and inputs from industry leaders. As the managing editor at Smart Market News, she assures that every piece of news and article adds to the knowledge of decision makers. An avid bike rider, Meeta, is a postgraduate from Indian Institute of Journalism and New Media (IIJNM) Bangalore, where her specialization was Business Journalism. She carries experience from mainstream print media including The Times Group and Sakal Media Group.
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