In a report from the Commerce Department released on Oct. 17, advance estimates of U.S. retail and food services sales for September 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $704.9 billion, up 0.7%.
This is an increase of .5% from the previous month and up 3.8 % above September 2022.
Total sales for the July 2023 through September 2023 period were up 3.1% from the same period a year ago.
The July 2023 to August 2023 percent change was revised from up 0.6% to up 0.8%
Michael Pearce, Lead US Economist of Oxford Economics offered the following analysis:
- The 0.7% increase in retail sales in September and upward revisions to gains in previous months round out a strong quarter for real consumption growth, which we think was between 3.5%-4% annualized in Q3. While mounting headwinds to consumer incomes mean we expect spending growth to slow in the months ahead, the risks that spending contracts outright are fading.
- The jump in headline spending was helped by a price-related 0.9% rise in sales at gas stations and a 1.0% rise in autos spending. But the gains were far broader than that, with control group sales - which feed into GDP - rising by a strong 0.6%. Together with upward revisions to previous months' figures, control group sales rose 6.4% in Q3 overall, much stronger than the 2.4% increase in Q2, and consistent with a sharp acceleration in consumption growth. The strong 0.9% rise in food services sales suggests services consumption is expanding at a decent pace.
"The strength in spending at the end of Q3, alongside continued solid job gains, mean the economy is entering Q4 with more momentum than we previously thought," said Pearce, in a statement. "The risks to our forecast for a slight contraction in consumption in Q4 are firmly to the upside. The strength of the economy also means that Fed officials will leave the door open for additional rate hikes.
