Retail sales rose 1.9 percent in September, according to data released Friday by the Census Bureau, beating expectations and rebounding after four consecutive months of slowing gains.
Seasonally adjusted U.S. retail and food services sales for September totaled $549.3 billion, rising nearly 2 percent from August’s total of $539.0 billion and 5.4 percent from September 2019. September’s climb in retail sales also outpaced a 0.6 percent increase in August and 0.9 percent rise in July.
A 3.6 percent increase in automobile and auto parts sales, an 11 percent increase in sales by clothing and accessory stores, a 5.7 percent increase in sales by sports, hobby and book stores, and a 9.7 percent increase in department store sales powered September’s gains.
The September rebound in retail sales may soothe some concerns that fading fiscal stimulus and the expiration of a boost to unemployment benefits would sap consumer spending. Consumer spending drives roughly two-thirds of U.S. gross domestic product.
The March enactment of the $2.2 trillion CARES Act is widely credited by economists for dampening the initial economic blow of the coronavirus pandemic and providing enough support to spur a recovery that began in May. But the expiration and exhaustion of much of that aid has appeared to slow the pace of the rebound from the coronavirus recession.
“Retail sales were a welcome upside surprise,” said Diane Swonk, chief economist at Grant Thornton, in a Friday tweet.
Even so, the September retail numbers showed signs of the growing gulf between Americans hit hardest by the coronavirus downturn and those who’ve held onto their jobs and livelihoods.
Swonk said the meager 0.1 percent increase in grocery store sales is an indication of rising food insecurity, which “underscores [the] gap between high and low wage households.”
Roughly 10 percent of U.S. households sometimes or often did not have enough food to eat, according to a Census Bureau survey released last week.