Consumers spent at a much faster pace than expected in September, with retail sales rising 1.9% in a sign that the U.S. economy’s biggest driver remains healthy.
Economists surveyed by Dow Jones expected sales to rise 0.7%, up from a 0.6% rise in August.
Excluding autos, the gain amounted to 1.5%, which also was better than the 0.4% estimate.
Clothing and accessories led the gains, rising by 11%, while sporting goods, music and books jumped 5.7%. Electronics and appliances was the only major sector that was negative, dropping 1.6% from the August levels.
Markets reacted positively to the news, with Dow futures implying an opening gain of about 126 points.
However, economists expect that number to turn around when third-quarter growth is announced at the end of the month, with the Atlanta Fed’s GDPNow tracker pointing to a 35.2% increase. That would be more than double any single-quarter growth going back to at least 1947.
Beyond that, concerns are rising that the fourth quarter could see a marked slowdown as virus cases continue to rise. The holiday shopping season will be a key for what kind of momentum the U.S. sees as the calendar turns into 2021.
A drop in electronics sales could be seen as one harbinger of a slowdown. The September 2020 total also represented a decline of 6.4% from the pace of a year ago.
This is breaking news. Please check back for updates.