Consumers spent at a faster pace than expected last month as the economy recovers from pandemic-related closures.
The 1.9% increase in retail sales was more than twice the gain economists were expecting and represents the fourth consecutive monthly improvement in consumer spending, the major driver of the U.S. economy.
Clothing and accessories led the gains, rising by 11%, while sporting goods, music and books jumped 5.7%. Food and beverage sales were flat, according to data from the U.S. Census Bureau.
Electronics and appliances was the only major sector that was negative, declining 1.6% from August levels.
Consumers continue to prove their resilience and strength through this pandemic, said Matthew Shay, NRF’s president and chief executive officer.
“Retailers and consumers are adapting to the current environment, embracing shopping in different ways and focusing on specific categories. We’re optimistic about the prospects for a strong holiday season, as people want something to look forward to and bring joy to their lives,” Shay said in an October 16 statement. “While it’s been a challenging year for everyone, there’s been an enormous amount of innovation within the retail industry and retailers have demonstrated that we can keep the economy open and operating safely.”
While the U.S. economy has made strides in recovery from pandemic-related shutdowns earlier this year, some economists see a “K-shaped recovery,” where the pace of the rebound is unequal among earners and job sectors.
“Retail sales are continuing to build on the momentum we’ve seen through the summer and have been boosted by an improving labor market, a rebound in consumer confidence and elevated savings,” said Jack Kleinhenz, NRF’s chief economist. “A significant number of people remain unemployed, but more are going back to work and that makes them confident about spending. September retail sales reflect the support of government measures and elevated savings that is being spent now that consumers are shopping again. With less spending on personal services such as travel and entertainment outside the home, some of that money is shifting to retail cash registers. All in all, these numbers and other economic data show the nation’s economy remains on its recovery path.”
NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants in order to focus on core retail – showed September was up 1.3% seasonally adjusted from August and up 12% unadjusted year-over-year.
Three-quarters of retail categories saw both month-over-month and year-over-year increases, according to NRF.
Specifics from key retail sectors during September include:
- General merchandise stores were up 1.8% month-over-month seasonally adjusted and up 4.1% unadjusted year-over-year. Department stores, a subset of the category, were up 9.% month-over-month.
- Health and personal care stores were up 1.7% month-over-month seasonally adjusted and up 7.8% unadjusted year-over-year.
- Online and other non-store sales were up 0.5% month-over-month seasonally adjusted and up 27% unadjusted year-over-year.
- Grocery and beverage stores were unchanged month-over-month seasonally adjusted but up 11.5% unadjusted year-over-year.