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Brian Wesbury
Chief Economist
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Bob Stein
Deputy Chief Economist
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 | Retail Sales Declined 0.1% in September |
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| Posted Under: Data Watch • Retail Sales |
Implications: A lackluster headline on retail sales today, but the underlying details of the report were quite positive. Retail sales declined 0.1% in September but the drop was all due to auto sales, which are volatile from month to month and which appear set for a rebound in October despite the partial government shutdown. Ex-autos, retail sales were up 0.4% in September, led by groceries and restaurants & bars. "Core" sales, which exclude autos, building materials, and gas, rose 0.5% in September, are up fifteen straight months, and 3.6% above sales a year ago...which probably explains why we don't hear any more about the federal spending sequester or fiscal cliff deal killing the consumer. Overall retail sales are up 3.2% in the past year. Assuming consumer prices rose 0.2% in September, "real" (inflation-adjusted) sales are up about 2%. Including an estimate of services, it appears real consumer spending grew at a 1.3% annual rate in Q3. Factoring in today's reports on inventories and yesterday's on the production of high-tech equipment, it appears that real GDP grew at a modest 1.8% annual rate in Q3. For the time being, the economy continues to be a Plow Horse, with growth hovering around 2%, sometimes higher, sometimes lower. Expect more of the same in Q4 before the economy accelerates in 2014.
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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