U.S. retail sales rose in September for the fifth consecutive month, as consumers prepared for additional months of working and studying from home by spending on automobiles, sports goods and in home improvement stores.
A measure of purchases in stores, restaurants and online, retail sales rose to a seasonally adjusted 1.9% in September from last month, the Department of Commerce reported on Friday, exceeding expectations. of economists for a 0.7% increase.
“September is kind of a month of hinges” between back-to-school and holiday season, said Craig Johnson, president of Customer Growth Partners, a consulting firm. He added that this year’s study period was postponed until September as many schools delayed opening for personal classes, giving second-hand sales of school supplies and computers.
However, other data suggest that economic recovery is losing momentum. Overall consumer spending remains below prepandemic levels as outlays on personal services such as dentist visits, travel events and sports are not fully rebounded. Monthly earnings at work have slowed in recent months. New applications for unemployment benefits, a proxy for layoffs, rose last week to their highest level since late August. And more workers are reporting that their layoffs are permanent.
Blerina Uruci, an economist at Barclays, says how strong consumer spending is for solid goods.
“This is a transfer from services that in many ways are forced because people have to be more careful because of [coronavirus] pandemic, “he said.
Retail sales returned to prepandemic levels in June and have been pushing higher each month since. The retail sales report does not track spending on most services, such as health care and hospitality, which make up the portion of U.S. consumer spending. Unlike other economic data reports produced by the US government, retail sales are not suitable for inflation.
Laura Harrison and her husband, Drew, bought a home in Nashville, Tenn., In July because they wanted more space, including an office for Ms. Harrison, who worked from home before the pandemic.
They face “many costs that we are not prepared for” associated with buying their home, such as appliances. “We got to a place where we were really indebted, and buying a house would bring us back a little more than we ever thought possible.”;
Ms. also noticed. Harrison is creeping inflation, with increasing fuel and food. His grocery bill increased by about $ 75 to $ 100 per shopping trip compared to before the pandemic, he said.
“Just all those little things, the everyday things that seem to rise even if the fee does not rise,” said Ms. Harrison, who works as a media planner for a TV company.
SHARE YOUR MIND
How did your spending habits change during the pandemic? Join the conversation below.
Sales to motor-vehicle dealers make up about 20% of total retail sales, and spending on motor vehicles gained sharply last month, rising 3.6% on the month.
That is partly related to consumers avoiding public transport due to the high infection rate of Covid-19 and rising vehicle prices, according to economists. The Labor Department last week reported that while the consumer price index rose 0.2% in September, the index for used cars and trucks jumped 6.7%. New car prices rose 0.3% from last month.
But real-time data from private companies shows total consumer spending, which includes outlays for personal services, is still less than a year.
Credit- and debit-card data collected by Affinity Solutions and research team Opportunity Insights showed overall spending fell 2.3% by the end of September compared to January levels. JPMorgan Chase & Co. credit- and debit-card transaction tracker showed spending was down 5.8% compared to a year ago until the week ended October 10.
Write to Harriet Torry at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8