US retail sales rise 0.8% in September, lifted by higher gasoline prices

The US Commerce Department reported on October 15 that September retail sales rose 0.8% from the previous month, beating economists’ forecast of 0.3%.^[1] Sales reached $745 billion, though growth slowed from August’s upwardly revised 1.3% increase.^[2]

Higher gasoline prices boosted the total, while spending elsewhere was moderate.^[3] Retail sales measure dollars spent without adjusting for price changes, so a higher total does not necessarily mean shoppers bought more goods.

Unless household budgets rise alongside fuel bills, paying more at the pump leaves less money for nonessential purchases. With spending elsewhere moderate, the report does not establish broadly stronger demand for retailers and could temper economists’ expectations for another quarter of robust consumer-spending growth.^[3]

For fuel retailers, higher prices can lift revenue even if the amount of gasoline sold is unchanged, but fuel purchasing costs also affect profit. More gasoline sales dollars alone therefore establish neither higher volumes nor better earnings.

Impact

What to watch next

• September US import prices, due October 16, will test whether imported goods are adding to price pressure on household purchasing power; the forecast is a 0.8% monthly rise after 0.7%.