U.S. retail sales rose less than expected in September, taking a breather after a recent stretch of strong gains.
Retail sales rose 0.2%, following an unrevised 0.6% increase in August, the Commerce Department’s Census Bureau reported Tuesday.
Economists polled by Reuters had forecast that retail sales, which are mostly goods and are not adjusted for inflation, would rise 0.4% after a 0.6% rise in August.
The report, initially scheduled for mid-October, was delayed by the government shutdown that lasted 43 days.
Sales had accelerated in previous months, in part because consumers rushed to buy battery-powered electric motor vehicles before tax credits for such vehicles expire at the end of September. The moderation in sales probably does not change economists’ expectations that consumer spending picked up in the third quarter.
Retail sales, excluding automobiles, gasoline, building materials and food services, fell 0.1% in September, after a downwardly revised 0.6% increase in August. So-called underlying retail sales correspond more closely to the consumer spending component of Gross Domestic Product. A 0.7% advance was previously reported in August.
However, spending is being driven by higher-income households, while many middle- and lower-income consumers are burdened by rising costs, some of them stemming from import tariffs, creating what economists have called a K-shaped economy.
Although job growth picked up in September, the labor market is weakening, with the unemployment rate reaching a four-year high of 4.4%.
With the recent stock market decline, some economists worry that high-income households could begin to reduce spending and hinder economic growth. Ahead of the retail sales data, the Atlanta Federal Reserve estimated that GDP rose at an annualized rate of 4.2% in the third quarter.
The Government will publish the GDP estimate for the third quarter on December 23. The economy grew at a pace of 3.8% in the second quarter, with most of the increase due to a smaller trade deficit.
