Retail Sales in the U.S. in September Drop Less Than Forecast

Oct. 14 (Bloomberg) -- Sales at U.S. retailers fell less than anticipated in September, a sign households will play a greater role in the emerging economic recovery.

The 1.5 percent decrease in purchases followed a 2.2 percent gain the prior month, figures from the Commerce Department showed today in Washington. Sales excluding automobiles climbed 0.5 percent, more than the median forecast of economists surveyed by Bloomberg News.

The broad-based improvement indicates Americans are becoming more confident that the economy is recovering even as job losses persist. The report helps ease concern consumers will retrench as government stimulus, such as the “cash-for- clunkers” plan, fades and joblessness mounts.

“Consumers are back spending,” Christopher Low, chief economist at FTN Financial in New York, said before the report. “We’re likely to see unexpected strength in consumer spending through the end of the year. At some point we need to transition from government spending to consumer spending and hopefully, this’ll be the beginning.”

Retail sales were projected to drop 2.1 percent after an originally reported 2.7 percent gain in August, according to the median estimate of 78 economists in a Bloomberg News survey. Forecasts ranged from declines of 0.6 percent to 4 percent.

Excluding automobiles, sales were forecast to increase 0.2 percent, according to the survey median.

Sales at automobile dealerships and parts stores plunged 10 percent, the most since August 2005, after the Obama administration’s incentive program expired. Purchases in August jumped 7.8 percent.

‘Clunkers’ Plan

The government program allowing consumers to trade in older models for new, more fuel-efficient ones ended Aug. 24, translating into a 35 percent drop in auto sales last month, industry figures showed earlier this month. General Motors Co., Toyota Motor Corp. and Ford Motor Co. posted declines.

Outside of autos, only three of the other 12 categories showed a drop in sales last month, building on the broad gains seen in August, when purchases in every category except one climbed.

The gains last month were lead by furniture stores, which showed a 1.4 percent jump in sales, the most since January 2007. Purchases at department stores climbed 0.4 percent, grocery stores showed a 0.9 percent increase and clothing stores were up 0.5 percent

Full story:
Retail Sales in the U.S. in September Drop Less Than Forecast - Bloomberg.com

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