US retail sales rose 0.8% in September and beat forecasts, but higher gasoline prices drove most of the gain. Spending elsewhere was moderate, which could temper expectations for another quarter of robust consumer spending growth.
US retail sales rose 0.8% in September after an upwardly revised 1.3% jump in August, the Census Bureau said on Thursday. Economists polled by Reuters had forecast a 0.3% gain. The figures are mostly goods and are not adjusted for inflation.
Gasoline accounts for most of the increase
Rising gasoline prices accounted for most of the increase in retail sales, according to Reuters. Gasoline prices rose 7.1% in September, Energy Information Administration data showed.
ActionForex, analyzing the Census Bureau data, found that gasoline stations accounted for approximately 71% of the rise in total retail sales. Gasoline station receipts increased 6.4% from August.
Spending outside fuel slows
Without gasoline, the picture looks weaker. ActionForex reported that retail sales excluding gasoline slowed from 1.0% to 0.2% in September.
Reuters, meanwhile, said retail sales excluding automobiles, gasoline, building materials and food services edged up 0.1% after surging 1.2% in August. Economists had forecast a 0.3% gain in these core sales, which correspond most closely with the consumer spending component of gross domestic product.
Lower-income households feel the strain
The oil price shock from the US-Israeli war with Iran is putting a strain on consumers, especially those in the lower part of what economists call a K-shaped economy. Inflation-adjusted wages fell again in September, and higher-income households are doing the heavy lifting, partly thanks to stock market gains.
Most districts in the Federal Reserve's Beige Book, per its Wednesday report, "reported little or no change in overall consumer spending" between late August and early October.
Economists expect consumer spending grew at around a 3.4% annualized rate in the third quarter, after a 3.8% pace in the April-June quarter.
Sources: Reuters via Investing.com, ActionForex
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