Retail sales, which accounts for about one-third of US gross domestic product, have weakened further in September, capping off the worst quarter in almost two decades. According to the monthly Commerce Department report, retail sales dropped 1.2% in September, well below expectations. Excluding the brutal 3.8% drop in automobile purchases, sales still fell 0.6%. Economists were expecting a 0.8% drop in total sales and a 0.3% loss ex-auto.
US consumer spending had been the engine of US and global growth for most of the decade, but high debt loads, falling home prices, rising energy prices, flat income growth and poor job prospects have taken their toll on the American consumer.-via MarketWatch.
Many fear that consumer spending in the US will further erode, as economists have already projected a decline in inflation-adjusted consumer spending for the first time since 1991.
In the past year, retail sales are down 1.1%. Sales are down year-over-year for the first time since 2002. The figures are not adjusted for price changes.
Demand for consumer durables was weak in September. Sales at furniture stores dropped 2.3%, while sales at electronics and appliance stores fell 1.5%. Sales at hardware stores fell 0.6%.
Soft goods didn’t fare any better. Sales at general merchandise stores fell 0.4%, including a 1.5% drop at department stores. Sales at clothing stores fell 2.3%.
Sales of leisure-time goods, such as books and sporting goods, fell 1.1%. Sales at food stores and restaurants fell 0.5%.
Sales rose 0.1% at gasoline stations. Sales increased 0.4% at health and personal care stores. Sales at nonstore retailers, such as catalog and online stores, fell 0.8%.
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