US retail sales beat projections
WASHINGTON - Retail sales rose more than projected in September, reflecting broad-based gains that indicate household spending helped bolster economic growth last quarter.
The 1.1 percent advance followed a revised 1.2 percent increase in August that was the biggest since October 2010 and larger than previously reported, Commerce Department figures showed Monday in Washington. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent rise.
A drop in joblessness and firming home prices are leading to gains in confidence that may help chains such as Target Corp. and TJX Cos. keep attracting customers. At the same time, rising energy costs and concern about looming tax changes at the end of the year may prevent consumer spending, which accounts for about 70 percent of the economy, from strengthening much more.
There is "some resilience on the part of the consumer," said Michael Feroli, chief U.S. economist at JPMorgan Chase in New York, who projected a 1 percent increase in sales. "We are going to continue to see slow, but steady, growth."
Manufacturing in the New York region contracted in October for a third straight as sales and employment declined, indicating the economy will get less support from factories, another report Monday showed. The Federal Reserve Bank of New York's general economic index rose to minus 6.2 from minus 10.4 in September, which was the lowest since April 2009.
Economists' estimates in the Bloomberg survey ranged from gains of 0.3 percent to 1.3 percent. The reading for August was revised from an initially reported increase of 0.9 percent.
Twelve of 13 major categories showed gains last month, led by auto dealers, service stations and electronics stores.
Sales climbed 1.3 percent at automobile dealers, after a 1.8 percent increase the prior month, today's report showed. The results are in sync with industry figures issued earlier this month.
Cars and light trucks sold at a 14.9 million annual pace in September, the most since March 2008, according to Ward's Automotive Group. Chrysler and General Motors reported gains.
"We continue to be encouraged by positive signs from the housing sector, lower jobless claims, higher consumer sentiment and higher consumer spending," Kurt McNeil, GM's vice president of U.S. sales, said on an Oct. 2 conference call. "The stiffest headwinds are uncertainty, some of which is related to the sovereign debt crisis in Europe and concerns about the pace of growth here at home."
Retail sales excluding autos increased 1.1 percent, the most since January, today's report showed. They were projected to rise 0.7 percent, according to the Bloomberg survey median.
Filling-station sales advanced 2.5 percent.
The retail sales data, which aren't adjusted for prices, may have reflected an increase in gasoline prices. A gallon of regular fuel at the pump cost an average $3.83 in September, up 13 cents from August and the highest level since April, according to AAA, the biggest U.S. auto group.
Electronics dealers showed a 4.5 percent jump in sales, the biggest gain since October 2011. The introduction of the Apple Inc. iPhone 5 at the end of the month probably help spur demand. Similarly, non-store retailers, which include online merchants, may have also benefited, leading to a 1.8 percent gain in receipts.
Spending increased 0.6 percent at clothing stores and 0.3 percent at general merchandise stores.
Retailers benefited from demand for back-to-school items, with September same-store sales topping analysts' estimates at discount and specialty-apparel chains. Target, the second- biggest U.S. discounter, had a 2.1 percent gain from a year earlier, and TJX, the owner of T.J. Maxx and Marshalls, reported a 6 percent increase.
Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales climbed 0.9 percent, the best performance since July, after a 0.1 percent gain the previous month.
A stronger labor market would help boost the outlook for retail sales. Payrolls rose 114,000 in September after a 142,000 increase the prior month, according to Labor Department figures. The unemployment rate dropped to a three-year low of 7.8 percent from 8.1 percent.
Household purchases may have grown at a 1.9 percent annual rate in the third quarter after a 1.5 percent gain in the prior three months, according to the median forecast in a separate Bloomberg survey of economists taken from Oct. 5 to Oct. 10. Spending will rise 2.1 percent this quarter, the survey showed.